Rakuten buying eBook firm OverDrive for $410 million in U.S. push — Reuters

TOKYO (Reuters) – Japanese online retailer Rakuten Inc is buying U.S. eBook company OverDrive Inc for about $410 million, deepening its push into the U.S. market and into the “sharing economy”.

Rakuten’s announcement on Thursday about the OverDrive deal comes a week after it led a $530 million funding round for U.S ride-sharing service Lyft, signaling Rakuten’s shift in focus towards more-rental based businesses.

The acquisition of OverDrive, which currently offers eBook rental services to U.S. libraries and schools, is expected to be completed in April. It will push Rakuten’s eBook business EBITDA (earnings before interest, tax, depreciation and amortization) for 2015 closer to profit, the company said in a statement.
“OverDrive can be described as a ‘sharing economy’ business as it shares books,” Takahito Aiki, head of Rakuten’s global eBook business, told reporters.

Aiki said that Kobo Inc, a Canadian eBook company Rakuten bought in 2011 for $315 million, is “phase 1” of its eBook business as it allows consumers to buy eBooks. As part of “phase 2,” OverDrive will allow libraries and schools to rent eBooks, he said.

Another reason for the purchase is the firm’s aggressive drive into the U.S. market, Aiki said.
Rakuten has been on a buying spree in recent years to reduce reliance on its home market. In October it bought U.S. discount store Ebates.com for about $1 billion.