Best Buy emerged as the surprise buyer of Napster on Monday, though the subscription service has been seeking an acquisition for some time.
UBS Investment Bank was the exclusive financial representative for Napster, and Best Buy completed the deal using available cash. Subtracting a $67 million Napster cash balance, the net price tag was $54 million for Best Buy.
The buyout was unanimously approved by the Napster Board of Directors, and cools a recent revolt by a small group of shareholders. Napster will enter the Best Buy fold as a wholly-owned subsidiary, according to paperwork filed with the US Securities & Exchange Commission (SEC). Best Buy is not planning to relocate Napster from its Los Angeles headquarters, or stage serious personnel changes, though the company is undoubtedly leaving its options open.
Best Buy, a Minneapolis-based consumer electronics giant, will retain the current Napster leadership. That includes Chairman and CEO Chris Gorog, President Brad Duea, and Chief Operating Officer Christopher Allen. The refreshed contracts will extend through March 3rd, 2012, and outline respective base salaries of $400,000, $315,000 and $315,000. Performance-based bonus packages – including some guarantees for Gorog – are also being layered into those agreements, as well as options grants in Best Buy (BBY) stock.