NOOK Media, LLC, a subsidiary of Barnes & Noble, Inc.
(NYSE: BKS), the leading retailer of content, digital media and
educational products, today announced that Pearson (NYSE: PSO), the
world’s leading learning company, has agreed to make a strategic
investment in NOOK Media, LLC. Pearson has agreed to invest $89.5
million in cash in NOOK Media, LLC at a post-money valuation of
approximately $1.789 billion in exchange for preferred membership
interests representing 5% equity stake. Following the closing of
the transaction, Barnes & Noble will now own approximately
78.2% of the NOOK Media subsidiary and Microsoft, which also holds
preferred membership interests, will own approximately 16.8%.
Subject to certain conditions, Pearson will earn the option to
purchase up to an additional five percent ownership in NOOK
Media.
Pearson’s strategic investment in NOOK Media will accelerate
customer access to digital content by pairing its leading expertise
in online learning with NOOK Media’s expertise in online
distribution and customer service. This will facilitate improved
discovery of available digital content and services, as well as
seamless access.
"We formed NOOK Media to be a leader in the exploding market for
digital content," said William Lynch, Chief Executive Officer of
Barnes & Noble, Inc. "Pearson is a forward thinking company
similarly focused on reading and learning, with powerful assets and
a terrific management team. We welcome their partnership in NOOK
Media, and look forward to working with them and Microsoft to
deliver great digital experiences for our shared customers."
Will Ethridge, Chief Executive Officer of Pearson North America,
said, "Pearson and Barnes & Noble have been valued partners for
decades, and in recent years both have invested heavily and
imaginatively to provide engaging and effective digital reading and
learning experiences. This new agreement extends our partnership
and deepens our commitment to provide better, easier experiences
for our customers. With this investment we have entered into a
commercial agreement with NOOK Media that will allow our two
companies to work closely together in order to create a more
seamless and effective experience for students. It is another
example of our strategy of making our content and services broadly
available to students and faculty through a wide range of
distribution partners."
About Barnes & Noble, Inc.
Barnes & Noble, Inc. (NYSE: BKS) is a Fortune 500 company
and the leading retailer of content, digital media and educational
products. The company operates 689 Barnes & Noble bookstores in
50 states, and one of the Web’s largest e-commerce sites, BN.com
(www.bn.com). Its NOOK Media LLC subsidiary is a leader in the
emerging digital reading and digital education markets. The NOOK
digital business offers award-winning NOOK® products and an
expansive collection of digital reading and entertainment content
through the NOOK Store™ (www.nook.com), while Barnes & Noble
College Booksellers, LLC operates 674 bookstores serving over 4.6
million students and faculty members at colleges and universities
across the United States. Barnes & Noble is proud to be named a
J.D. Power and Associated 2012 Customer Service Champion and is
only one of 50 U.S. companies so named. Barnes & Noble.com is
ranked the number one online retailer in customer satisfaction in
the book, music and video category and a Top 10 online retailer
overall in customer satisfaction according to ForeSee E-Retail
Satisfaction Index (Spring Top 100 Edition).
General information on Barnes & Noble, Inc. can be obtained
via the Internet by visiting the company's corporate website:
www.barnesandnobleinc.com.
About NOOK Media LLC
NOOK reading and entertainment products make it easy to read
what you love, anywhere you like™ with a fun, easy-to-use and
immersive digital reading experience. With NOOK, customers gain
access to the expansive NOOK Store™ of more than 3 million digital
books, plus periodicals, comics, apps, movies and TV shows, and the
ability to enjoy content across a wide array of popular devices
through free NOOK Reading Apps™ and NOOK Video apps, available at
www.nook.com/freenookapps. NOOK owners receive Always Free NOOK
Support in any of Barnes & Noble’s nearly 700 bookstores. Find
NOOK devices in Barnes & Noble stores and online at
www.nook.com, as well as leading retailers including Best Buy,
Walmart, Target and many others. NOOK products are available in the
United Kingdom through www.nook.co.uk and leading
retailers.
For more information on NOOK, follow us on
www.twitter.com/nookBN or www.twitter.com/nook_UK and
www.facebook.com/nook.
About Pearson
Pearson, the world’s leading learning company, has global reach
and market-leading businesses in education, business information
and consumer publishing (NYSE: PSO).
Forward-Looking Statements
This press release contains certain forward-looking statements
(within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended) and information relating to Barnes & Noble that are
based on the beliefs of the management of Barnes & Noble as
well as assumptions made by and information currently available to
the management of Barnes & Noble. When used in this
communication, the words "anticipate," "believe," "estimate,"
"expect," "intend," "plan," "will" and similar expressions, as they
relate to Barnes & Noble or the management of Barnes &
Noble, identify forward-looking statements.
Such statements reflect the current views of Barnes & Noble
with respect to future events, the outcome of which is subject to
certain risks, including, among others, the general economic
environment and consumer spending patterns, decreased consumer
demand for Barnes & Noble's products, low growth or declining
sales and net income due to various factors, risk that
international expansion will not be successfully achieved or may be
achieved later than expected, possible disruptions in Barnes &
Noble's computer systems, telephone systems or supply chain,
possible risks associated with data privacy, information security
and intellectual property, possible work stoppages or increases in
labor costs, possible increases in shipping rates or interruptions
in shipping service, effects of competition, possible risks that
inventory in channels of distribution may be larger than able to be
sold, possible risk that returns from consumers or channels of
distribution may be greater than estimated, the risk that the
expected sales lift from Borders’ store closures is not achieved in
whole or part, the risk that digital sales growth is less than
expectations and the risk that it does not exceed the rate of
investment spend, higher-than-anticipated store closing or
relocation costs, higher interest rates, the performance of Barnes
& Noble's online, digital and other initiatives, the
performance and successful integration of acquired businesses, the
success of Barnes & Noble's strategic investments,
unanticipated increases in merchandise, component or occupancy
costs, unanticipated adverse litigation results or effects, product
and component shortages, the potential adverse impact on the
business resulting from the review of a potential separation of the
NOOK digital business, the risk that the transactions contemplated
with Pearson are not able to be implemented on the terms
contemplated or at all, the risk that the transactions do not
achieve the expected benefits for the parties including the risk
that NOOK Media’s applications are not commercially successful or
that the expected distribution of those applications is not
achieved, the risk that any subsequent spin-off, split-off or other
disposition by Barnes & Noble of its interest in NOOK Media
results in adverse impacts on Company or NOOK Media (including as a
result of termination of agreements and other adverse impacts), the
potential impact on Barnes & Noble’s retail business of the
separation, the potential tax consequences for Barnes & Noble
and its shareholders of a subsequent spin-off, split-off or other
disposition by Barnes & Noble of its interest in NOOK Media,
the risk that the international expansion contemplated by the
relationship is not successful, the risk that NOOK Media is not
able to perform its obligations under the commercial agreement, the
risk that Barnes & Noble may not recoup its investments in the
NOOK digital business as part of any separation transaction, the
risks, difficulties, and uncertainties that may result from the
separation of businesses that were previously co-mingled including
necessary ongoing relationships, and potential for adverse customer
impacts and other factors which may be outside of Barnes &
Noble’s control, including those factors discussed in detail in
Item 1A, "Risk Factors," in Barnes & Noble's Annual Report on
Form 10-K and Form 10-K/A, and in Barnes & Noble's other
filings made hereafter from time to time with the SEC. Our forward
looking statements relating to international expansion are also
subject to the following risks, among others that may affect the
introduction, success and timing of the NOOK e-reader and content
in countries outside the United States: we may not be successful in
reaching agreements with international companies, the terms of
agreements that we reach may not be advantageous to us, our NOOK
device may require technological changes to comply with applicable
laws, and marketplace acceptance and other companies have already
entered the marketplace with products that have achieved some
customer acceptance.
Should one or more of these risks or uncertainties materialize,
or should underlying assumptions prove incorrect, actual results or
outcomes may vary materially from those described as anticipated,
believed, estimated, expected, intended or planned. Subsequent
written and oral forward-looking statements attributable to Barnes
& Noble or persons acting on its behalf are expressly qualified
in their entirety by the cautionary statements in this paragraph.
Barnes & Noble undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise after the date of this
communication.
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