Roxio has promised to realaunch a 'legal version' of Napster after it has completed its acquisition of online music service Pressplay.
The digital media software firm said that, as a result of this transaction, it has acquired a legal digital music distribution infrastructure and catalogue rights with all five major music labels, which it will use as the core of its promised Napster-branded music sharing service.
"Roxio's acquisition of Pressplay significantly accelerates the development of our online music business which is central to the strategic development of our company," said Chris Gorog, chairman and chief executive of Roxio, in a statement.
"With our acquisition of Napster we obtained the most powerful brand in the online music space. Now, with our acquisition of Pressplay, we have the most complete and scalable legal technology infrastructure to use as a platform to re-launch Napster.
"After taking the necessary time to add features, enhance functionality and improve usability we will launch a new service with an extremely compelling consumer experience that builds on the qualities of the Napster brand."
Under the terms of its agreement, Roxio has acquired most of the interests of Pressplay, created as a joint venture between Universal Music Group (UMG) and Sony Music Entertainment (SME).
Roxio purchased its majority ownership for $12.5m in cash and approximately 3.9 million shares of Roxio common stock.
The deal has been valued at $39.5m, excluding transaction costs estimated at approximately $1m.
In addition, SME and UMG each have the right to earn up to $6.25m based on positive cash flows resulting from the new Napster service.
Both will also provide a representative to join Roxio's board of directors.
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