Minneapolis, Oct. 23, 2014 -- Digital River, Inc. (NASDAQ: DRIV), a leading global provider of Commerce-as-a-Service solutions, today announced that it has entered into a definitive merger agreement to be acquired by an investor group led by Siris Capital Group, LLC (collectively “Siris”) in a transaction valued at approximately $840 million.
Under the terms of the agreement, Siris will acquire all of the outstanding common shares of Digital River for $26.00 per share in cash, representing a premium of approximately 50 percent over the closing price on October 23, 2014, and 67 percent over Digital River’s volume weighted average share price during the 90 days ended October 23, 2014. The agreement was approved by Digital River’s Board of Directors, which recommended that Digital River’s stockholders adopt the agreement with Siris.
Under the terms of the agreement, Digital River may solicit alternative acquisition proposals from third parties during a 45-day “go-shop” period, following the date of execution of the merger agreement. There is no guarantee that this process will result in a superior proposal. A special meeting of Digital River’s stockholders will be held as soon as practicable following the filing of a definitive proxy statement with the U.S. Securities and Exchange Commission and subsequent mailing to stockholders.
“We are pleased to have reached this agreement with Siris, which provides significant value to our shareholders and represents a clear endorsement of our transformation strategy, our industry leading ecommerce and payments solutions, our 1,300 global experts and our deep commitment to clients,” said David Dobson, Digital River’s CEO. “We believe that this transaction will provide Digital River with the flexibility to innovate and execute our vision of setting the standard for global ecommerce technology and services. Siris has extensive industry expertise, and working with Siris, Digital River will continue to create even more compelling ways to deliver ecommerce excellence and customer growth.”
“With 20 years of global ecommerce expertise, Digital River has a leading market position and significant global growth potential in the Commerce-as-a-Service market,” said Dan Moloney, Siris Capital Executive Partner. “We are excited to work with the talented employees to build on the Company’s success as a global leader in ecommerce, payments and marketing services. We look forward to supporting Digital River as it continues to serve its world-class client base while exploring new opportunities to drive innovation and global growth.”
Siris has secured committed financing consisting of a combination of equity and debt. The equity financing will be provided by an investor group led by Siris and the debt financing will be provided by Macquarie Capital and Sankaty Advisors.
The transaction is subject to customary closing conditions, including the receipt of shareholder approval and the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, but is not subject to any financing condition. Upon completion of the acquisition, Digital River will become wholly owned by an affiliate of Siris. The transaction is currently expected to close in the first quarter of 2015.
Morgan Stanley & Co. LLC is acting as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor to Digital River in connection with the transaction. Macquarie Capital (USA) Inc., Union Square Advisors LLC, and Evercore Partners Inc. are acting as financial advisors and Simpson Thacher & Bartlett LLP is acting as legal advisor to Siris in connection with the transaction.
For further information regarding the terms and conditions contained in the definitive merger agreement, please see Digital River’s Current Report on Form 8-K, which will be filed in connection with this transaction.
Digital River plans to release its third quarter earnings after market close on Wednesday, October 29, 2014, and does not intend to hold a conference call to discuss earnings given today’s announcement.
About Digital River, Inc.
Backed by 20 years of ecommerce experience, Digital River is recognized as a leading global provider of Commerce-as-a-Service solutions. Companies of all sizes rely on Digital River’s multi-tenant, SaaS commerce, payments and marketing services to manage and grow their online businesses. In 2013, Digital River processed more than $30 billion in online transactions, connecting B2B and B2C digital products and cloud service companies as well as branded manufacturers with buyers across multiple devices and channels, and nearly every country in the world.
Digital River is headquartered in Minneapolis with offices across the U.S., Asia, Europe and South America. For more details about Digital River, visit the corporate website, follow the company on Twitter or call +1 952-253-1234.
About Siris Capital Group
Siris Capital is a leading private equity firm focused on making control investments in data, telecommunications, technology and technology-enabled business service companies in North America. Integral to Siris' investment approach is its partnership with exceptional senior operating executives, or Executive Partners, who work exclusively with Siris to identify, validate and operate investment opportunities. Their significant involvement allows Siris to focus on complex, special situations; typically businesses caught in the midst of a technology transition, which creates operational, strategic, and financial challenges.
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Source: Company press release.
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