Worldwide education publisher Pearson announces $89.5m investment for e-reader retailer NOOK Media.

NOOK Media, the US-based subsidiary of book retailer Barnes & Noble (B&N) that handles its NOOK e-reader, will receive $89.5m cash in strategic investment at a post-money valuation of approximately $1.79bn from education publisher Pearson. Once completed, Pearson will own a 5% equity stake in the B&N spin out, and will earn the option to purchase another five percent. B&N will retain a 78.2% stake in NOOK, while Microsoft will own approximately 16.8%. Microsoft took part in a venture round when NOOK was first being spun out of B&N in January of 2012. The software developer invested $300k, and was the sole participant in the round. Pearson said in a joint statement that the strategic investment will pair “its leading expertise in online learning with NOOK Media’s expertise in online distribution”. “We formed NOOK Media to be a leader in the exploding market for digital content,” said William Lynch, chief executive officer (CEO) of B&N. “Pearson is a forward thinking company similarly focused on reading and learning, with powerful assets and a terrific management team. We welcome their partnership in NOOK Media, and look forward to working with them and Microsoft to deliver great digital experiences for our shared customers.” Will Ethridge, CEO of Pearson North America, added: “Pearson and Barnes & Noble have been valued partners for decades, and in recent years both have invested heavily and imaginatively to provide engaging and effective digital reading and learning experiences. This new agreement extends our partnership and deepens our commitment to provide better, easier experiences for our customers. With this investment we have entered into a commercial agreement with NOOK Media that will allow our two companies to work closely together in order to create a more seamless and effective experience for students. It is another example of our strategy of making our content and services broadly available to students and faculty through a wide range of distribution partners.”

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