In response to several third-party inquiries about acquiring all or a part of the company, Napster Inc. has retained an investment banking firm to help evaluate various strategic options.
Napster has retained UBS Investment Bank to assist its board of directors and management in its evaluation of various strategic alternatives, including a possible sale. "Napster is in a strong position to continue aggressively building our business as an independent company and we are pleased to also have the opportunity to thoughtfully examine potential combinations that may further enhance Napster's unique strategic and brand position in the center of digital media,” says Napster CEO Chris Gorog. “Our goal is to enhance shareholder value which could potentially lead to a new strategic partnership or the sale of the company but in any event our primary focus will remain on growing Napster."
Various third parties are interested in Napster both for its financial performance and its base in online entertainment and digital music. "Napster has a strong balance sheet with a healthy cash position of $97 million as of the close of the first quarter and we are currently generating annual revenues in excess of $100 million,” says Napster chief financial officer Nand Gangwani. “For the second half of our fiscal year, we project a strong up-tick in subscription growth from a base of more than half a million subscribers and a significant expansion of our mobile business, including the addition of new tier one wireless partners. We are also looking forward to launching in Japan this fall as scheduled, expanding our global footprint to include the top four music markets in the world."
Napster, No. 100 in the Internet Retailer Top 500 Guide to Retail Web Sites , has not set a definitive timetable for completing its evaluation.
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