Rakuten buying eBook firm OverDrive for $410 million in U.S. push

By Teppei Kasai

TOKYO (Reuters) - Japanese online retailer Rakuten Inc (4755.T) is buying U.S. eBook company OverDrive Inc for about $410 million, deepening its push into the U.S. market and into what it calls the "sharing economy."

Rakuten's announcement on Thursday of the OverDrive deal comes a week after it led a $530 million funding round for U.S. ride-sharing service Lyft, signaling Rakuten's shift in focus toward more rental-based businesses.

Rakuten is purchasing Cleveland, Ohio-based OverDrive from Insight Venture Partners, a U.S.-based venture capital and private equity firm that first invested in it in 2010. The acquisition of OverDrive, which currently offers eBook rental services to U.S. libraries and schools, is expected to be completed in April.

The deal will push Rakuten's eBook business EBITDA (earnings before interest, tax, depreciation and amortization) for 2015 closer to profit, the company said in a statement.

"OverDrive can be described as a 'sharing economy' business as it shares books," said Takahito Aiki, head of Rakuten's global eBook business.

Aiki said Kobo Inc, a Canadian eBook company Rakuten bought in 2011 for $315 million, is "phase 1" of its eBook business as it allows consumers to buy eBooks. As part of "phase 2," OverDrive will allow libraries and schools to rent eBooks, he said.

Another reason for the purchase is the firm's reach in the U.S. market, Aiki said.

Rakuten has been on a buying spree in recent years to reduce reliance on its home market in Japan. In October it bought U.S. discount store Ebates.com for about $1 billion.

The San Francisco-based boutique investment bank Qatalyst Partners advised OverDrive on the deal.

(Editing by Sunil Nair and Muralikumar Anantharaman; Additional reporting by Liana B. Baker in New York; Editing by Chris Reese)