Digital River buys Element 5
Takes out European rival
Digital River is taking out European rival Element 5 in the nicest possible way. It is buying the privately-held German firm for $120m and may shell out another $2.5m for performance over two years. Funding for the deal is underpinned by a $45m secured credit line with Harris Trust and Savings Bank.
Element 5 was Digital River's biggest competitor by far. They both supply the ecommerce and digital download backbone for software publishers. So when you download antivirus or tax preparation software, say, chances are, Digital River or Element 5 is doing the online donkey work in the background. Element 5 claims 10,000 customers in more than 150 countries and derives 60 per cent of its revenues from outside the US. Digital River gets 70 per cent of its turnover from the US.
The Minnesota, US firm yesterday posted Q1 revenues of $31.9m, around 30 per cent higher than same time last year. ®