Tech Industry

Digital River pulls back on Beyond deal

The company will not buy Beyond.com's Government Systems business as previously planned because it says certain closing conditions of the acquisition have not been met.

Digital River said Monday that it is backing out of part of its agreement to acquire assets of troubled e-tailer Beyond.com.

The company, which provides outsourcing for e-commerce companies, said that because certain closing conditions had not been met, it is backing out of the agreement to buy Beyond.com's Government Systems business.

Digital River had agreed to snap up assets of Beyond.com's eStores and Government Systems businesses for $11 million, of which $3.5 million was cash and $7.5 million was Digital River common stock.

Beyond.com filed for Chapter 11 bankruptcy protection Jan. 25, the same day it announced the Digital River acquisition.

Digital River will now spend a little more than $4 million in stock to acquire all of Beyond.com's eStores business, including its assets and customer contracts. The deal has certain escrow, sale and resale restrictions.

If certain performance goals are met, Beyond.com could get an additional $1.85 million in Digital River stock. However, if those targets are not hit, the purchase price could fall. The original agreement had given Beyond.com the possibility for an additional $1.5 million in Digital River stock.

Additional specifics of the deal were not disclosed.

Digital River said the new agreement means it needs less money to support the acquired businesses. Under the terms of the new agreement, Digital River is not assuming liabilities of Beyond.com other than obligations under the Beyond.com client contracts.

The revised deal remains subject to bankruptcy court approval and other conditions.