RealNetworks doubles stake in Rhapsody International, owns 84% of Napster
RealNetworks announced that it has acquired debt and equity interests in Rhapsody International, which does business as "Napster," from Rhapsody Applebee, LLC, an entity managed by Columbus Nova Technology Partners. The purchase took place after RealNetworks sought and received special approval from the U.S. Treasury Department's Office of Foreign Assets Control to purchase the sanctioned stake in Napster. Following the transaction, RealNetworks has become the majority owner of Napster, with approximately 84% of outstanding stock, up from RealNetworks' previous stake of approximately 42%. In exchange for all of the CNTP-managed equity, debt, and other interests in Napster, RealNetworks has committed to pay $1M cash up front and an additional $14M over time subject to certain conditions, with additional consideration depending on subsequent events, for a total of up to $40M. The entity managed by CNTP would receive the full $40M in the case of a sale or similar liquidity event within the next five years where total equity value of the 42% equity interest acquired would exceed $60M. Napster will continue to run as an independent subsidiary of RealNetworks with its own board of directors, strategy, and management team. Bill Patrizio will continue to be Napster's CEO, and Rob Glaser will continue as Napster's Chairman.