RealNetworks’ $320 Million Shopping Spree: More To Come


RealNetworks’ purchase of GameTrust is the sixth buy the company has made in the last 18 months. Expect more to come.

That’s because Real (RNWK) CEO Rob Glaser has a bulging warchest, courtesy of a $760 million settlement he extracted from Microsoft in 2005, and he seems itching to use it. We figure he’s spent about $320 million of it on M&A so far, spent another $100 million on share buybacks and has earmarked another $100 million for the same reason. The leftovers, plus cash thrown off by Real’s operations, are substantial: At the end of Q2, Glaser had $614 million in cash lying around, and he has said he intends to keep spending it. Here he is during Real’s Q1 earnings call (via Seeking Alpha):

In addition to share buybacks, we also see acquisitions as a great way to use our balance sheet to create value and strengthen our market position. As I’ve said recently and reiterate today, we remain committed to being both active and disciplined with M&A activity and highly focused on excellent integration of any acquisitions we do consummate.

Here’s his post-settlement shopping list to date:

  • Zylom, a European casual games developer & publisher (February 2006; $21M)
  • WiderThan, a provider of mobile music and entertainment solutions (September 2006; $350M – $260M net of WiderThan’s cash)
  • Atrativa, a Brazilian games distributor (February 2007; est $1 million)
  • Sony NetServices, white label digital music services for mobile operators (May 2007; $9M)
  • Exomi (July 2007; $11M)
  • GameTrust (approx $20M)

Who’s next? Bet on more games companies. While Real is best known for its media player and its Rhapsody music service, the growth of both of those businesses seems limited. But casual games have plenty of upside: The industry is only just beginning to tap into the online ad boom, and it’s littered with small players who could be easily be consolidated.

Related: Real/GameTrust Deal A Firesale?
RealNetworks Adds GameTrust