RealNetworks doubles stake in Napster in a deal that could be valued up to $40 million

RealNetworks Inc. said Tuesday it has doubled its stake in Napster, in a deal that could be worth up to $40 million. After receiving approval from the Treasury Department's office of Foreign Assets Control, RealNetworks acquired the debt and equity interests in Rhapsody International, which does business as Napster, from Rhapsody Applebee LLC, which is managed by Columbus Nova Technology Partners. The deal increases RealNetworks's stake in Napster to 84% from 42%. Under terms of the deal, RealNetworks will pay $1 million in cash, and an additional $14 million over time subject to certain conditions, with additional consideration depending on subsequent events, that could total up to $40 million. RealNetworks said Napster has reported five-straight quarters of positive operating income. "This success was achieved by pivoting to a B2B strategy focused on selling the Napster platform as a service," said RealNetworks Chief Executive Rob Glaser. "We think Napster's future is very bright." The stock, which was still inactive in premarket trade, has soared 38% over the past three months, while the S&P 500 has lost 3.1%.

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