Sony To Sell Gracenote To Tribune For $170 Mln

(RTTNews) - Japanese consumer electronics giant Sony Corp. (SNE, SON.L) said Monday that it has agreed to sell its audio-recognition software business Gracenote, Inc. to media company Tribune Company (TRBAA.PK) for $170 million, subject to standard adjustments. The company expects the sale to close prior to March 31, 2014, subject to regulatory approvals.

Sony said it will sell all of the shares of Gracenote to Tribune for $170 million. Emeryville, California-based Gracenote is a wholly-owned subsidiary of Sony Corp. of America, Sony's American unit. The company provides audio recognition and metadata solutions to device makers and media companies.

Gracenote features descriptions of more than 180 million tracks and TV listings for more than 30 countries, which is used to power information retrieval for music services like iTunes, Rhapsody, Spotify, and Xbox Music. The database receives more than 550 million queries everyday and more than 16 billion every month.

Gracenote is best known for providing the software that lets Apple Inc.'s (AAPL) iTunes quickly identify songs when a user transfers tracks to a computer from a compact disc. Gracenote also is integrating its software into televisions so marketers can learn what a person is watching and target ads based on demographics.

Gracenote's technology is included in many of Sony's products such as smartphones and televisions. Sony is the maker of the PlayStation game console, Xperia smartphones and Bravia television sets.

Sony said it expects to record a gain within operating income of about $60 million at the completion of the sale, based on the above sale price. In October 2013, Sony included an anticipated gain from this sale in its financial forecast for the fiscal year ending March 31, 2014.

The sale of Gracenote is part of Sony's efforts to divest units and focus on fewer products. Bloomberg reported last week that Sony hired Frank Quattrone's Qatalyst Partners to explore a sale of Gracenote. Sony acquired Gracenote in 2008 for about $260 million.

In a separate statement, Tribune said it will combine Gracenote with Tribune Media Services or TMS, a provider of television and movie metadata. The Chicago-based company noted that the acquisition of Gracenote will enable it to expand into music technology and metadata.

Peter Liguori, President and Chief Executive Officer of Tribune said, "This transaction extends and complements TMS' best-in-class core competency in the metadata business, while also deepening Tribune's slate of subscription services."

SNE closed Monday's trading at $17.76, up $0.20 or 1.14 percent on a volume of 1.07 million shares. In after-hours, the stock further gained $0.08 or 0.45 percent to $17.48.

TRBAA closed Monday's trading at $77.35, up $0.64 or 0.83 percent on a volume of 239,346 shares.