Best Buy to Acquire Napster

Best Buy (BBY) this morning announced a deal to buy online music site Napster (NAPS) for $2.65 a share in cash. That comes to $121 million, or $54 million net of Napster’s $67 million in cash and short-term investments as of June 30. The deal is expected to close in the fourth quarter. Best Buy said it signed employment agreements with Napster CEO Chris Gorog and other key senior managers of the company to stay on after completion of the deal.

Napster had revenue in the March 2008 fiscal year of $127.5 million, with a loss of $16.5 million. Best Buy will use cash on hand to complete the deal.

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