Kobo Logo

From the press release:

Rakuten, Inc. (JASDAQ: 4755) and Kobo Inc. today announced that they have entered into a definitive agreement under which Rakuten intends to acquire 100% of total issued and outstanding shares of Kobo for US$315 million in cash.

Kobo was founded by and spun out of Indigo, the largest book, gift and specialty toy retailer in Canada, in December, 2009. Since that time, Kobo has become a fierce competitor in the eBook marketplace, with a family of innovative eReaders, a wide range of eReading apps, one of the largest eBook catalogues, an innovative social platform and retail partners around the globe.

The acquisition marks a major step forward for Rakuten, one of the world’s top 3 e-commerce companies by revenue, as it continues to expand its unique B2B2C borderless e-commerce business globally, by adding an ecosystem to provide downloadable media products to consumers, starting with eBooks.

Hiroshi Mikitani, Chairman and CEO of Rakuten, commented on the acquisition, “We are very excited about this next step. Kobo provides one of the world’s most communal eBook reading experiences with its innovative integration of social media, such as Facebook and Twitter; while Rakuten offers Kobo unparalleled opportunities to extend its reach through some of the world’s largest regional e-commerce companies, including Buy.com in the US, Tradoria in Germany, Rakuten Brazil, Rakuten Taiwan, Lekutian in China, TARAD in Thailand, and Rakuten Belanja Online in Indonesia, and of course, Rakuten Ichiba in Japan.”

“From a business and cultural perspective this is a perfect match,” commented Kobo CEO Michael Serbinis. “We share a common vision of creating a content experience that is both global and social. Rakuten is already one of the world’s largest e-commerce platforms, while Kobo is the most social eBook service on the market and one of the world’s largest eBook stores with over 2.5 million titles. This transaction will greatly strengthen our position in our current markets and allow us to diversify quickly into other countries and e-commerce categories.”

Upon closing the acquisition, Kobo will continue to maintain its headquarters, management team and employees based in Toronto, Ontario.

Thanks to Vicki Fox Smith for the heads up.


  1. wow. I’m not sure how I feel about this. It may mean that Kobo will really give Amazon a run for its money. It may mean nothing will change, at least not at first. We may see more kepub books, which would further fracture the already fractured ebook format standards.

    one thing about the whole social aspect of Kobo reading… I’m not terribly social, particularly when I’m reading, and I just don’t see the charm of the Kobo social reading aps.

  2. I don’t understand why Indigo would sell its stake in Kobo.

    Indigo is a major, big-box book retailer in Canada. They created Kobo so that they would have a toe-hold in the eBook business. Now, they have gone back to being only a bricks and mortar, paper book store chain.

    Without Kobo, does Indigo have a future?

  3. Why did Indigo sell?
    A few possibilities:
    1- Kobo is in expansion mode, with investment costs outpacing revenue growth
    2- the revenue from the sale ~$160million is about equal to Indigo’s market capitalization. Think about it.
    3- investing in ebooks is *not* the only way to weather the industry disruption; as pointed out around here last week, bookstores can also restructure to serve the niche pbook business and hope to outlive competitors, or they can “bet on retail” and diversify into other dry goods sales. Indigo has already made moves to diversify and better monetize their retail space so, as long as they maintain a positive cash flow and don’t tie their fate to books, they can probably manage a soft landing to whatever state the canadian book retailing business ends up in.

    Essentially, the found themselves where B&N is: a B&M retailer in a declining business with essentially zero value, that also owned a promising digital content business hungry for revenue and producing very little, if any, near-term profit. Two mouths to feed and barely enough milk for one…on a diet. So they gave Kobo up for adoption. 😉

  4. I’m disappointed Kobo has gone from Canadian to 100% Japanese ownership but, heck, welcome to the world of International commerce. I am much more concerned that Kobo grow as a viable, international competitor to Amazon Kindle. (Don’t get me wrong: I love the Kindle ereading tools; I just like having choice.) Kobo has laid some great foundation and clearly management have a vision they are executing on successfully. Being able to sell the enterprise at $315 million cash (and, presumably, assume all debt and liabilities) is impressive. The ebook business just isn’t that big yet (unless you are Amazon).

    It might, in fact, give Barnes and Noble shareholders pause if they come to believe that spinning off Nook would provide them with a similar reward for patience and investments to date. And, given Sony’s tragic, now-multi-year losses and general corporate malaise, Kobo could step decisively into the third spot globally in the coming months.

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