Barnes & Noble announced today that they were splitting the 700 plus college stores operated by B&N into its own wholly owned company called B&N Education.
For the past 3 years Barnes & Noble’s college store division has been bundled into its digital division, Nook Media. As Nook Media’s fortunes waned, it’s been clear that B&N was going to have to split off the still financially healthy college stores from the toxic digital unit.
And today B&N finally acted.
According to the press release and SEC filing, B&N plans to split the college stores from the rest of the company, turn it into its own company, and then distribute the stock in the new company to B&N stockholders. The split will be complete by August 2015.
That’s a rather curious move on the part of B&N. The retailer had previous announced plans to split Nook Media off into a wholly owned company, but now the digital unit is going to remain part of B&N.
Clearly that plan was derailed by the quarter after quarter of declining digital revenues, resulting in a company which no one would want to invest in, so B&N is instead going to split off the relatively healthy college stores.
B&N Education is going to include the stores as well as Yuzu, the digital textbook platform which B&N launched last year. Given that students are reporting that Yuzu is utterly useless, I’m not sure what value it adds, and it would seem B&N doesn’t think it’s ready for prime time either.
B&N mentions in the prospectus that they plan to “pursue growth opportunities more broadly in the education sector, including by enhancing and expanding our digital assets. Achieving these goals will likely require acquisitions or mergers funded, in part, with capital raises and strategic alliances with other companies.”
The new B&N Education is estimated to be worth $775 million. That’s far less that the billion and a half value hung on Nook Media when it was announced 3 years ago, but it is still more than the $436 million which B&n spent to buy the college stores unit from B&N founder Len Riggio in 2009.
image by Brad Clinesmith