Loudeye Purchases EU Digital Music Service OD2

od2midem.jpgAs expected, Europe’s biggest online music provider OD2, founded by Peter Gabriel (Gabriel and OD2 CEO Charles Grimsdale, in the picture on the right, speaking at the Midem Music Festival in Cannes earlier this year, which I attended) is being acquired, but the acquirer is a big surprise: Seattle-based digital media and music tech provider Loudeye, in a deal valued at least $38.6 million, reports WSJ.

Executives from both companies said their deal was prompted in large part by a growing interest from potential partners in introducing music services that aren’t limited to the U.S. and Europe. “Virtually every company we talk to wants to deploy a global strategy,” says Jeff Cavins, Loudeye’s CEO, in this story.

Under the terms of the deal, Loudeye will pay OD2 shareholders $20.7 million, including $18.4 million in stock and $2.3 million in cash. Loudeye agreed to pay an additional $17.9 million in cash or stock over the next 18 months, for a total of $38.6 million in guaranteed payments.

OD2 powers the music sites for MSN in UK, Coke Music, Tiscali, HMV and others. Microsoft, on the other hand, has an already existing tie-up with Loudeye in U.S. It is an incestuous circle of connections…

Related:

OD2 Sale Announcement Today?

OD2, Microsoft Team Up on Windows Media Jukebox

OD2 Launches New Jukebox

Loudeye’s Revenues Decrease On Webcasting Decline

Infrastructure Company Becomes Digital Media Partner

Loudeye Acquires Overpeer

Loudeye Completes $20 Million Equity Financing

AT&T Wireless to offer music service (With Loudeye)

Loudeye, Microsoft team on music store

Music market winks at Loudeye

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