RealTime IT News

Adding Migration to the Model

E-commerce services company Digital River Inc. in Minneapolis acquired Calico Commerce Inc.'s Market Maker business, allowing Digital to expands its solutions so that client companies can migrate between outsourcing and managing their e-commerce operations in-house.

Digital River said the all-stock deal, valued at about $8 million, includes personnel, the Market Maker technology and clients. Digital, which bills itself as a Commerce Service Provider, said the deal makes it "the first outsourcer of its kind to offer a multi-channel e-commerce suite that can be outsourced in a hosted environment or purchased as a packaged application."

"By combining Calico's commerce platform with our e-commerce services model and expertise, we can create a hybrid solution that offers companies the ultimate flexibility in building a long-term, low-risk, scaleable commerce solution," said Joel Ronning, Digital River's CEO.

"Whether companies choose to outsource their e-commerce operations, manage them in-house with our new packaged application, or migrate from one solution to the next, we can provide a clean, easy-to-navigate e-commerce road map," he said.

Digital River acquired Calico's Market Maker business and its associated assets in exchange for approximately 1.6 million shares of Digital River common stock, which was trading at $5 at mid-morning, up 18 cents.

The agreement includes an unspecified earn-out for additional shares of Digital River common stock based upon the revenue generated by the Market Maker product over the next 13 months.

Digital River plans to hire the approximately 30 Calico employees involved in the sales, service and development of Market Maker.

The deal includes a distribution and OEM licensing agreement that lets Digital River license Calico's Advisor (a configurator) and Price Point (a catalog-pricing engine) applications in a hosted environment. Calico will be able to license back Market Maker.

In addition, San Jose, Calif.-based Calico, a provider of e-business apps that let users execute real-time pricing and manage quote and order processes via the Web, will act as Digital River's distribution channel in Japan for sales of Market Maker.