Roxio To Acquire Napster Assets
Digital media company Roxio has agreed to acquire the most substantial remaining assets of embattled Internet music provider Napster Inc. Roxio will acquire Napster's technology patents but is not assDigital media company Roxio has agreed to acquire the most substantial remaining assets of embattled Internet music provider Napster Inc. Roxio will acquire Napster's technology patents but is not assuming any of the company's outstanding financial liabilities. The deal is subject to a Nov. 26 Delaware bankruptcy court approval. Napster, based in Redwood City, California., filed for Chapter 11 bankruptcy protection on June 3. It listed assets of $7.9 million and liabilities of $101 million, as of April 30.
The terms of the deal include a purchase offer of $5 million in cash and 100,000 warrants to purchase Roxio common stock. The company is perhaps best known for such software products as Toast and Easy CD Creator.
"Roxio's acquisition of Napster will expand our role in the digital media landscape and enhance our offerings to consumers," Roxio president/CEO Chris Gorog said in a statement. "We look forward to continuing to work with our partners in the entertainment industry and will be announcing further plans in the coming months."
At its peak, Napster attracted some 60 million users, but was crippled by legal showdowns with the world's largest record companies, who accused the company of wide-scale copyright infringement. Previously, BMG parent Bertelsmann had loaned Napster $92 million in an attempt to convert it into a pay service.