Acquires for approximately $45m in cash, composed of payments to stockholders of $32.4m and $12.6m in liabilities.

Digital River, Inc., a provider of e-commerce outsourcing, yesterday announced that it has signed an agreement to acquire Commerce5, Inc., a provider of e-commerce solutions for high-tech manufacturing and consumer electronics markets. Upon the closing of the acquisition, Commerce5 will become a wholly-owned subsidiary of Digital River.

Under the terms of the agreement, Digital River acquired Commerce5 for approximately $45 million in cash, composed of payments to stockholders of $32.4 million, plus payment of $12.6 million in liabilities. In addition, pursuant to the terms of an Inducement Equity Incentive Plan established for Commerce5 executives who will join Digital River as a result of the acquisition, a total of 87,500 restricted shares of Digital River stock will be issued to retain their services following the acquisition. These shares will vest based upon Commerce5 meeting certain performance goals. The acquisition, which is subject to certain conditions of closing, is expected to close in December 2005.

"The acquisition of Commerce5 presents an exciting opportunity for Digital River," said Joel Ronning, Digital River's CEO. "We already have demonstrated success growing online businesses for industry-leading manufacturers of high-tech products in markets that are closely aligned with the software publishing space. Now, we intend to leverage that success through the acquisition of Commerce5 to further extend our reach and accelerate our growth in the broader high-tech marketplace."

"By combining our companies, we can offer clients expanded e-commerce capabilities that cross physical and digital boundaries as well as incremental growth opportunities in international markets and online reseller channels," said Rob Hagen, Commerce5's CEO. "Together, we intend to create a powerful environment for online sales and set a new standard of service excellence in delivering comprehensive outsourced e-commerce solutions."