RealTime IT News

Digital River Acquires Maagnum Internet Group, Public Software Library

Minneapolis-based ESD company Digital River acquired two e-commerce providers, Maagnum Internet Group and Public Software Library Ltd. (PSL).

The acquisitions expand Digital River's client base to include an additional 2,500 publishers of shareware, a new market for Digital River. Both Maagnum and PSL possess shareware transaction processing capabilities that offer an enabling technology for consumers to purchase software after a free download.

"The acquisition of Maagnum enables us to enhance our business model by adding more than 500 shareware publishers to our client base," said Joel Ronning, CEO and founder of Digital River. "The shareware market is growing rapidly and is important to Digital River. . . .We believe we can add substantial value for Maagnum's software publisher clients. Additionally, we can offer our clients Maagnum's Digibuy service that allows publishers of digital content to independently set-up, maintain and run their own online stores."

Other Maagnum clients will have the option of obtaining Digital River's expanded services, including ESD, Web store hosting, 24/7 customer service, marketing, merchandising and enhanced reporting.

Digital River acquired Maagnum Internet Group for $2.5 million in cash and 116,650 shares of Digital River common stock valued at approximately $5.2 million at the time of closing. In addition, the principals of Maagnum will have the opportunity to receive up to 512,000 additional shares of common stock based on performance over the next two years.

Through the acquisition of Public Software Library, Digital River will provide commerce services to over 2,000 shareware authors who publish over 20,000 freeware and shareware titles.

Digital River acquired PSL for 161,842 shares of Digital River common stock which were valued at $6.5 million at the time of closing.

"PSL has a unique blend of shareware and freeware clients that offer products for business and the home," said Ronning. "The shareware market is an excellent complement to our business and leverages off our existing infrastructure. We look forward to serving the PSL client base."

Maagnum and PSL had combined revenues of approximately $7 million in 1998.