Microsoft (MSFT) and Barnes & Noble (BKS) announced on Thursday that their joint venture partnership announced back in April will be called NOOK Media LLC. The new Barnes & Noble subsidiary is backed by a $300 million investment from Microsoft, which has a 17.6% equity stake. The companies also announced the imminent launch of the NOOK reading app for Windows 8. Microsoft president Andy Lees described NOOK Media as “a leader in developing the next generation of digital reading” and added that “we look forward to the company bringing one of the world’s largest digital libraries to Windows 8 devices via their upcoming Windows 8 app.” The two companies’ press release follows below.
Barnes & Noble and Microsoft Complete Strategic Partnership in New Subsidiary: NOOK MEDIA LLC
Includes Barnes & Noble’s NOOK® Digital and College Businesses as well as Microsoft Investment to Advance Digital Reading Experience
NEW YORK & REDMOND, Wash.–(BUSINESS WIRE)– Barnes & Noble, Inc. (NYSE: BKS ) and Microsoft (Nasdaq: MSFT ) today announced the completion of their previously announced strategic partnership in NOOK Media LLC, a recently formed Barnes & Noble subsidiary and a leader in the emerging digital reading and digital education markets. Microsoft and Barnes & Noble’s strategic partnership in NOOK Media LLC will enable the companies to advance world-class digital reading experiences to the hundreds of millions of customers they jointly serve.
NOOK Media LLC comprises the digital and College businesses of Barnes & Noble and will continue to have a very close and mutually beneficial relationship with Barnes & Noble’s retail stores. The partnership includes a $300 million investment from Microsoft in NOOK Media LLC.
“As demand for digital content continues to increase, we are focused on bringing ground-breaking reading and learning content and technologies to more people in more formats than ever before, including the imminent launch of our exceptional NOOK reading application for Windows 8,” said William Lynch, CEO of Barnes & Noble. “We look forward to working closely with our new partner Microsoft to add value to their innovative new platform by bringing great reading experiences and one of the world’s preeminent digital bookstores to millions of Windows 8 users.”
“NOOK Media is a leader in developing the next generation of digital reading and we look forward to the company bringing one of the world’s largest digital libraries to Windows 8 devices via their upcoming Windows 8 app,” said Andy Lees, President at Microsoft. “We are also excited by NOOK Media’s product roadmap and expansion into markets around the world as demonstrated by their recent launches in the United Kingdom.”
Microsoft made its $300 million investment in NOOK Media LLC at a post-money valuation of $1.7 billion in exchange for an approximately 17.6% equity stake, with Barnes & Noble owning the remaining shares.
As previously announced,there is no set timetable for Barnes & Noble’s review of strategic options for its investment in NOOK Media LLC. There can be no assurance that the review will result in a strategic separation or the creation of a stand-alone public company. Barnes & Noble does not intend to comment further regarding the review unless and until a decision is made.
About Barnes & Noble, Inc.
Barnes & Noble, Inc. (NYSE: BKS ) , the leading retailer of content, digital media and educational products, operates 689 bookstores in 50 states. Barnes & Noble College Booksellers, LLC, a wholly-owned subsidiary of Barnes & Noble, also operates 667 college bookstores serving over 4.6 million students and faculty members at colleges and universities across the United States. Barnes & Noble conducts its online business through BN.com (www.bn.com), one of the Web’s largest e-commerce sites, which also features more than 3 million titles in its NOOK Bookstore™ (www.bn.com/ebooks). Through Barnes & Noble’s NOOK® eReading product offering, customers can buy and read digital books and content on the widest range of platforms, including NOOK devices, partner company products, and the most popular mobile and computing devices using free NOOK software. Barnes & Noble is proud to be named a J.D. Power and Associates 2012 Customer Service Champion and is one of only 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: http://www.barnesandnobleinc.com.
NOOK®, NOOK® HD, NOOK® HD+, NOOK Tablet™, NOOK Simple Touch™ with GlowLight™, NOOK Simple Touch™, NOOK Color™, Reader’s Tablet™, Best-Text™ Technology, VividView™, PagePerfect™, NOOK Store™, NOOK Bookstore™, NOOK Book™, NOOK Newsstand™, NOOK Magazine™, NOOK Newspaper™, NOOK Apps™, FREE NOOK Reading Apps™, NOOK Kids™, NOOK Digital Shop™, NOOK Cloud™, NOOK® for Web, Read In Store™, More In Store™, LendMe®, NOOK Books en español™, NOOK Study™, NOOK Library™, Lifetime Library™ and Read What You Love. Anywhere You Like™ are trademarks of Barnes & Noble, Inc. Other trademarks referenced in this release are the property of their respective owners.
Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.
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 that are based on the beliefs of the management of Microsoft or Barnes & Noble, as applicable, as well as assumptions made by and information currently available to such management. When used in this press release, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “will” and similar expressions, as they relate to Barnes & Noble, NOOK Media Inc. or Microsoft or the management of Barnes & Noble or Microsoft, identify forward-looking statements.
Such statements reflect the current views of the relevant entities with respect to future events, the outcome of which is subject to certain risks, including, among others, the risk that any spin-off, split-off or other disposition by Barnes & Noble of its interest in NOOK Media LLC is not implemented, the risk that the transactions contemplated by this press release do not achieve the expected benefits for the parties including the risk that NOOK Media LLC’s applications are not commercially successful or that the expected distribution of those applications is not achieved, the risk that the separation of the digital and college businesses or any subsequent spin-off, split-off or other disposition by Barnes & Noble of its interest in NOOK Media LLC results in adverse impacts on Barnes & Noble or NOOK Media, Inc. (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 risk that the international expansion contemplated by the relationship is not successful, 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 LLC and the risk that NOOK Media LLC is not able to perform its obligations under the commercial agreement, including with respect to the development of applications and international expansion, and the consequences thereof and general risks related to the businesses that will become part of NOOK Media, Inc., including those risks discussed in detail in Item 1A, “Risk Factors,” in Barnes & Noble’s Annual Report on Form 10-K, and in Barnes & Noble’s other filings made hereafter from time to time with the SEC.
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. The parties undertake 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.