10 August 2004
Sonic To Buy Roxio Division For $80 Million
Posted by Zane under: News; Technology .
Sonic Solutions said Monday that it signed an agreement to buy the consumer software division of Roxio Inc. for a combination of cash and stock totaling $80 million.Sonic, which primarily makes DVD-creation software, said the acquisition will give it a well-recognized set of consumer software brands, access to long-standing distribution channels and strong marketing expertise.Roxio, the owner of the Napster music Web site, will receive $70 million in cash and Sonic shares valued at $10 million. The sale is part of Roxio’s plan to focus on the digital music market. The company said it is changing its corporate name to Napster and will trade under the ticker “NAPS” on the Nasdaq after the completion of the deal.
“Napster will emerge as a well-positioned pure-play in the fast-growing digital music sector with a substantially enhanced balance sheet that will support our growth plans,” Roxio chairman and chief executive Chris Gorog said in a press release.
The companies said they expect the deal to close in the fourth quarter.
Nasdaq - listed shares of Sonic closed earlier up 32 cents, or 2.6 percent at $12.63. Roxio stock, which also trades on the Nasdaq, closed up 16 cents, or 4 percent, at $4.14. In the extended session, Sonic was up nearly 7 percent and Roxio was up nearly 8 percent recently.
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