When it comes to hiding bad news, Christmas Day must come high on the list of best times to choose. In fairness, the release date and time for the press release was actually 6.30 PM on Christmas Eve, but seriously, how can we view this as anything other than an attempt to keep this story low profile?

Businesswire carries the full press release. Here just to pick out some highlights.

First the hopefully good news. KKR, a “leading global investment firm”, or more passively a “private equity firm”, depending on which report you read , will be the new parent of OverDrive.

Okay, that might not fill everyone with confidence, but investment firms can make sound publishing industry moves, as we saw with Waterstones in the UK and are currently seeing with Barnes & Noble in the US.

Further, in KKR’s own words,

KKR has a long history of successfully investing in market-leading businesses in the digital media and content sectors. KKR’s recent and related investments include Epic Games, AppLovin, RBmedia, Pandora, WebMD, UFC, Leonine, BMG Rights Management, Next Issue Media, and Nielsen, among others.

The press release is full of the de rigeur mutual appreciation we expect from a press release of this nature, and full disclosure, I know next to nothing about KKR that might challenge the sentiments expressed, so make no judgement on whether this is good or bad news for OverDrive..

Read the full press release here.

The release is in the future tense, simply confirming an agreement has been signed for KKR to acquire OverDrive from Rakuten US, the North America arm of Japan’s Rakuten. No date is stated as to when this will take place, and no financial details have been mentioned, but Jeremy C. Owens at Market Watch has this to say:

The two sides did not provide a price tag for the Ohio-based property, which Rakuten purchased for $410 million in 2015 , but Rakuten said it would recognize about $365.6 million in profit from the sale in the first quarter of 2020.

But let’s take a step back and consider the story behind the story.

It was back in November 2011 that Rakuten got into the ebook game, paying $315 million for Canada-based Kobo, and there have been very few obvious downsides since. Kobo has gone from strength to strength, most recently getting into audiobooks, and after Rakuten acquired OverDrive, which supplies global libraries with ebooks an audiobooks, the synergies came naturally.

It’s more than likely the existing practical synergies between Kobo and OverDrive will continue. For example, authors using the Kobo Writing Life self-publishing platform can distribute to OverDrive directly.

But why would Rakuten, if it plans to stay in the digital books sector, palm off OverDrive at all? After all, it was only in August 2018 that Rakuten Kobo partnered with WalMart, strengthening its position in the US market.

Up until this year OverDrive had been going from strength to strength, with over a quarter billion library downloads in 2018. That’s over 750,000 per day.

OverDrive apps like Sora have proven extremely popular.

So again, why would Rakuten want to ditch this asset?

This year OverDrive numbers will be down, thanks to several big publishers hiking prices to libraries, and some holding back content. But that can hardly have been enough to worry Rakuten.

Which begs the question, is Rakuten looking to get out of the digital books market altogether? And might Kobo be next inline for an equity firm buyout?

Assuming Kobo’s senior management were aware in advance of this OverDrive sell-off, they may know some background and have reason to be complacent. On the other hand, they might have found out from the newswires over Christmas, in which case there will probably be some sleepless nights ahead.

Which brings us back to the sobering reality of the announcement being made after business hours on Christmas Eve.

An announcement at any time during the Christmas shut-down period through to the New Year would be troubling, with the industry journals mostly dormant and only tech journals likely even aware of the news. That surely defies the very point of a press release – which is to maximise media coverage of the news therein.

But to release the news at 6.30 PM on Christmas Eve… Allowing that the news had to be broken at some stage, is there a worse time that could be thought up?

Either KKR’s public relations guys need firing with immediate effect, or this was an attempt to bury bad news.

As that realisation strikes home it will be setting alarm bells ringing throughout the industry (or will, as the industry shrug off its festive hangover and returns to work), the warm words of Steve Potash and the OverDrive team in the press release notwithstanding.

I sincerely hope there is some other explanation for the timing of this news release. I’m no authority on investment firms, and maybe KKR will be the best thing that ever happened to OverDrive.

We can on the one hand only fervently hope KKR has big ambitions for OverDrive (and a lousy PR team), and on the other, hope that this is not the beginning of the end of the Rakuten Kobo partnership.

2020 just got a whole lot more interesting, and a whole lot more uncertain.