Barnes and Noble College Invests in Flashnotes.com

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An investment by Barnes and Noble Education’s higher education-based business, Barnes and Noble College, will partner the bookselling giant with Flashnotes, Inc., an online venue on which students can buy and sell student-created, course-specific study materials.

Flashnotes.com was founded in Ohio in 2010 to give students the opportunity to  buy and sell study guides, notes, flashcards, video tutorials, and live video help from fellow students.

The two companies will also create a Strategic Alliance Agreement which will give Barnes and Noble College the ability to promote Flashnotes.com at partner schools and on digital platforms to encourage students to be active participants in their own education. Before this transaction, Flashnotes had raised more than $11 million in venture funding.

“One of the key objectives of the planned separation of Barnes & Noble Education, comprising the Barnes & Noble College business, from Barnes & Noble Inc., is to pursue strategic opportunities in the growing educational services markets , and our investment in Flashnotes.com is consistent with that objective,” said Max J. Roberts, Chief Executive Officer of Barnes & Noble Education.. “Together, Barnes & Noble College and Flashnotes.com can directly impact student success through a mutual partnership that aligns the student learning and studying experience with a built-in support system, while showcasing the campus bookstore as an important student resource.”

The Barnes and Noble College website describes this unit of Barnes and Noble’s organization as the country’s leading college campus store operator, working with public and private universities, community colleges and law, medical, and specialty schools.

Barnes and Noble, Inc. has also made plans to revitalize its Nook digital business, but the details concerning this move are not yet clear, except for the fact that it will remain part of the core retail stores group, according to Jerry A. Trachtenberg and Michael Calia writing for The Wall Street Journal.

John Tinker, an analyst at Maxim Group, said the new structure makes sense. “What this does is create a pure play for investors interested in the college market,” Mr. Tinker said. “Keeping the Nook inside the retail group is logical because they don’t currently know where it stands. Nook losses are shrinking, but it is still uncertain what’s really happening there.”

The spin-off of the Barnes and Noble College portion of the company will expand Barnes and Noble’s college bookstore business before it becomes a separate publicly-traded company later this year.

The company did not disclose the financial terms of the new investment, however. The Wall Street Journal’s Chelsey Dulany says the company will be looking for opportunities to grow in the areas of acquisition or mergers and will be hunting to raise capital and form strategic alliances.

“Separating Barnes & Noble Education will create an industry-leading, pure-play public company with more flexibility to pursue strategic opportunities in the growing educational services markets,” said Michael Huseby, Barnes & Noble’s CEO, in a statement.

The company’s college unit includes about 4,500 college and university-affiliated bookstores across the US that had combined sales of $10.5 billion in 2012. The move to make this division of Barnes and Noble a separate publicly traded-company will allow the division to build strength in a highly-disconnected market.