Seattle-based streaming-turned-computer-vision company RealNetworks Inc. (Nasdaq: RNWK) has agreed to merge with CEO Robert Glaser's affiliate Greater Heights LLC.
The deal, announced Thursday, is expected to close in the fourth quarter. Glaser and his affiliates currently own about 39% of RealNetworks' outstanding shares, according to the release, and the deal is contingent on majority approval of shareholders other than Glaser. Shareholders will vote on the deal at a meeting on a yet-to-be-announced date.
"I founded RealNetworks 28 years ago because I believed that the Internet represented a once-in-a-generation transformational opportunity for digital media," Glaser said in a release. "I'm happy that the RealNetworks board and I could reach agreement on a path to pursue that transformation with focus, efficiency, and speed by turning Real back into a private company, and in a way that is fair to all shareholders."
According to the release, outstanding shares of the company will be converted into the right-to-receive-cash consideration of 73 cents per share as part of the deal. RealNetworks first announced in May Glaser's intent to buy all outstanding shares of the company.
RealNetworks' board of directors, advised by a committee of independent directors, has approved the merger. Bruce Jaffe and Erik Prusch made up the independent committee that considered Glaser's offer.
In a February regulatory filing, the company said it faced delisting from the Nasdaq unless it could get its stock price to at least $1 per share over at least 10 consecutive business days. The company had until Aug. 17 to meet the requirement. RealNetworks' stock closed at 68 cents Thursday, up 17% from Wednesday.
RealNetworks offers facial recognition technology, text message management and casual games. In 2003, the company acquired Rhapsody, which began operating independently in 2010 and announced plans to acquire once-famous file-sharing service Napster in 2011. Rhapsody rebranded to the iconic Napster name in 2016, and RealNetworks sold Napster for about $70.6 million in 2020.
RealNetworks generated $13.3 million in revenue during the first quarter of 2022. In its heyday, with the formerly ubiquitous RealPlayer digital media player, the company generated as much as $152.6 million during the fourth quarter of 2008.
"The special committee is very pleased to have completed a thorough process that has resulted in a transaction with Rob that we believe provides immediate liquidity and compelling value to the public shareholders of RealNetworks without the risk of future performance and securing working capital in this economic climate," Jaffe said in the release.
