Who owns overdrive

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Best of , Google Play. Best Customer Service, Charleston Advisor. Over 95 percent of public libraries in the United States and Canada rely on OverDrive for digital lending, often supplemented by other services.

Though public libraries represent the largest portion of OverDrive's customers, it also works with schools and corporate libraries. Libby, introduced in , enables library patrons to search, checkout, and read e-books and audiobooks that their library has acquired through OverDrive. OverDrive resides within its digital content portfolio, which also included Rakuten TV, Viki, and the Kobo platform for e-books and audiobooks.

OverDrive's position in library lending complemented Toronto-based Kobo's focus on e-readers and content for the consumer market. The company's annual report emphasized the company's expansion as a telecommunications provider in Japan, working toward a fully cloud-based 5G mobile network. Within a company mostly focused on consumer-facing technologies and services, OverDrive was the company's only library-oriented business.

The acquisition of OverDrive by Rakuten would be described as a strategic investment, where a company is acquired by a larger entity with related business interests, usually with expectations enabling new synergies or efficiencies. Strategic investments usually endure for the long term, with the acquired company progressively integrated into the business and technical infrastructure of the acquiring organization.

Within the library industry, companies like EBSCO Information Services and ProQuest periodically make strategic acquisitions and rarely sell off any of their portfolio companies. The divestment of OverDrive after less than five years implies that Rakuten was not able to achieve the expected synergies within its digital content portfolio. In the context of the size of Rakuten and its broader business strategies primarily targeting consumers, OverDrive as a digital content provider to libraries may not have been a comfortable fit in the long term.

Although no longer under common ownership status, the interoperability and partnerships between Kobo and OverDrive will likely persist. Upon close of the transaction, which is expected in the first quarter of , KKR will assume ownership of OverDrive. Steve Potash will continue to lead the company as its Chief Executive Officer. The proposed acquisition of OverDrive by KKR is a financial investment, where the buyer, usually a private equity firm or other financial sponsor, expects to increase the value of the company over a finite term, typically five to seven years.

Financial investments by private equity firms often take the form of leveraged buyouts, where the buyer contributes only a portion of the purchase price and secures loans from investment banks to meet the full purchase price negotiated with the seller.

Financial buyers control the business strategies and operations of their portfolio companies via placement of representatives on their board of directors, usually in proportion to their ownership stake. The company itself is saddled with the responsibility to pay off the debts incurred. The debt and fees associated with a leveraged buyout are a component of the economic reality of companies following a leveraged buyout, but these transactions also provide the company with new capital to fund business expansion and product development.

Both KKR and Rakuten have wide-ranging investments, including some in common. KKR also owns RBmedia, one of the major suppliers of audiobooks to libraries. Sarnoff also holds a seat on the board of Cengage, in which KKR is also an investor. RBmedia offers a subscription service for consumers in addition to its library lending platform. The common ownership of OverDrive and RBmedia raises the question of whether there will be some type of merger between these two companies.

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