After taking a closer look at its plans to acquire the assets of bankrupt
Beyond.com, e-commerce enabler Digital River Inc. said it
has “elected not to acquire” Beyond’s Government Systems Group.
The deal was announced Jan. 25 when Santa Clara, Calif.-based B2B play Beyond
filed for bankruptcy, a victim of the Internet recession.
Eden Prairie, Minn.-based Digital River said
at the time it would pay $3.5 million in cash and $7.5 million in common
stock to Beyond.com for its eStores and Government Systems Group businesses,
subject to certain escrow and sale restrictions.
Today, Digital River said that “certain closing conditions related to the
acquisition of the Government Systems Group could not be met.” There was no
explanation of exactly what Digital River found upon closer examination of
the government business, but apparently the company did not like what it saw.
The new agreement provides that only Beyond.com’s eStores business will be
acquired by Digital River. The deal now is that Digital acquires
“substantially all of the assets and customer contracts” related to
Beyond.com’s eStores business in exchange for $4.01 million in Digital River
common stock, subject to certain escrow and sale restrictions and certain
resale registration rights.
The agreement also provides Beyond.com the opportunity for an earn-out of an
additional $1.85 million in Digital River common stock, and provides for
purchase price reductions in certain events. Further terms of the acquisition
were not disclosed.
The amended offer remains subject to bankruptcy court approval, Digital said.
Beyond.com was in trouble as early as January of 2000, when it lost a CEO,
abandoned retail software sales and
refocused on the B2B area.
Founded in 1994, Digital River is an e-commerce outsource provider, offering
more than 13,000 companies complete e-commerce systems and services.
Digital River Backs Off a Bit on Beyond.com
