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Digital River Goes Private Pending $840 Million Acquisition

Global eCommerce payments company Digital River has entered into an agreement to be acquired by investor group Siris Capital, LLC in a transaction valued at approximately $840 million. Pending approval of the deal, the publicly traded company will now be private as Siris will acquire all outstanding common shares of Digital River at a premium of about 50 percent over the stock closing price on October 23, the evening the acquisition was announced.

Digital River entered into a definitive merger agreement, but for a period of 45 days they are able to consider other acquisition proposals, and stockholders will also need to approve the acquisition, which has been recommended by Digital River’s Board of Directors. A special meeting for shareholders to vote on the deal is being organized and held as soon as possible. Pending shareholder approval and completion of the 45 day open period the acquisition will be completed.

Digital River is a company with 20 years of experience in the eCommerce payments industry touting several large clients such as Microsoft, Electronic Arts, Adobe, Lenovo and Citrix. The company processed over $30 billion in online transactions in 2013 including both B2B and B2C with a focus on digital products and services.

The acquisition and decision to be taken private comes at a time when Digital River has made several adjustments to increase profits. Following a $200 million loss in the fourth quarter of 2012 Digital River appointed David C. Dobson as their new CEO, which the company referred to as a turnaround effort. In the last two years the company has divested businesses, closed data centers and reduced head count globally.

Despite losses in the past two years Siris sees potential in the company and their investment. Executive Partner Dan Maloney expressed his excitement for Siris to work with Digital River’s “talented employees to build on the company’s success as a global leader in eCommerce,” and focused on the company “exploring new opportunities to drive innovation and global growth,” under the direction of Siris. David Dobson, Digital River CEO, also elaborated that the acquisition will give Digital River “the flexibility to innovate and execute our vision.” Dobson also reassured that Digital River will retain their company name and headquarters in Minnesota.

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