Siris Capital Close To Buying Digital River

The Siris Capital Group is paying $840 million to take over Digital River, a key early E-Commerce firm that is used as the checkout engine for hundreds of E-Commerce sites.

The deal is not definite, though, as the two firms worked out a waiting period for other potential buyers to materialize. “Though the company’s board signaled its acceptance of the Siris offer, under the deal, Digital River can wait 45 days for other buyers to emerge before making a final move. If another buyer comes along and Digital River goes with it, Siris will get paid $12.6 million,” according to a report in The Minneapolis Star-Tribune.

“We believe this transaction will provide Digital River with the flexibility to innovate and execute our vision of setting the standard for global e-commerce technology and services,” said Digital River CEO David Dobson.

The Star-Tribune story said that Dobson wrote a letter to employees promising that there are no plans to change the Digital River name nor its Minnetonka, Minnesota, headquarters location. Digital River specializes in a range of e-commerce services, including marketing, payments and tax services. Its clients include Microsoft Corp., and the firm has a strong presence in the websites of firms selling PC software, games and consumer electronics, the story said.

Financial analysts, while noting that the company has reported losses in the last year, have been upbeat about Digital River’s ability to turn things around in 2015. The story quoted Baird Equity Research analyst Colin Sebastian saying that the outlook looks good.

“In recent quarters, Digital River divested at least two businesses, closed two data centers and completed a global head count reduction,” Sebastian said. “As such, management now expects to bear the fruit of a more focused strategy to drive customer acquisition and retention.”