Digital River acquires Netgiro for $27 million

Digital River acquires Netgiro for $27 million

US e-commerce outfit Digital River has acquired privately-held Swedish payment services firm Netgiro for $27 million in cash.

The deal with Digital River trumps a previously-agreed offer of EUR10.25 million lodged by British rival Datacash in February this year. The purchase was put on hold following the defeat of a resolution at a Netgiro EGM called to pave the way for the deal.

At the time, Datacash said it was consulting its lawyers about possible legal steps arising out of the conduct of Netgiro and one of its shareholders in the period leading up to the EGM and at the meeting itself. Today, the company issued a statement saying that it is dropping its case.

"The Board of DataCash is pleased to announce that it has reached a satisfactory settlement with NetGiro International and the shareholder referred to above and no further legal action is being taken."

The Netgiro platform can support 20 online payment methods, ranging from credit and debit card processing, to direct debit, Internet bank payments, local bank transfers and cheques. The firm says the system can be applied to payment services in 40 countries and is used by an industry-leading client base.

Joel Ronning, Digital River's CEO says the transaction cements an ongoing partnership between the two firms. "By formalising this relationship and combining Netgiro's international payment platform with our existing world-class e-commerce infrastructure, we intend to accelerate our market-leading, global online transaction processing and payment capability."

The Netgiro business will continue to operate out of its current location in Stockholm, Sweden, he says, and the firm will continue to deliver its technology as a stand-alone payment platform as well as an integrated part of Digital River's e-commerce offering.

The initial upfront cash consideration of $27 million will be supplemented by an earn-out agreement conditional on Netgiro meeting pre-agreed financial targets. Netgiro's principal investors include Intrum Justia, Bonnier and Nordic Venture Partners.

Founded in 1994, Digital River is headquartered in Minneapolis with offices across the US and international presence in as well as Cologne, London, Shannon, Luxembourg, Taipei, Tokyo and Shanghai.

Shares in the vendor dipped 62 cents at the news to close at $45.51.

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