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Exhibit 20.1
PRESS RELEASE
FOR IMMEDIATE RELEASE
DIGITAL RIVER ACQUIRES NETSALES' SOFTWARE SERVICES DIVISION
Acquisition affirms Digital River's market leadership position
MINNEAPOLIS, MINN., AUGUST 25, 2000--Digital River, Inc. (Nasdaq: DRIV), the
world's largest Commerce Service Provider (CSP), today announced that it has
acquired the software services business of NetSales, Inc. which provides
outsourced business-to-business (B2B) and business-to-consumer (B2C)
e-commerce services for software publishers and software retailers. The
acquisition of the NetSales Technology division further establishes Digital
River's position as the number one provider of both B2B and B2C e-commerce
services for software and digital content publishers.
Under the terms of the agreement, Digital River acquired NetSales' software
services assets in exchange for 1,000,000 shares of common stock, with a
contingent earnout for an additional 350,000 shares of common stock based on
performance over the next 180 days. NetSales generated $1.3 million in net
transaction revenue in 1999 with over 500 clients. All of the operations will
be consolidated at Digital River.
Over the next 90 days, NetSales clients will be transitioned to Digital
River's commerce system and can immediately tap into the company's
comprehensive e-commerce services.
"The e-commerce market for software and digital content publishers continues
to offer a tremendous business opportunity," said Joel Ronning, Digital
River's CEO. "As businesses and consumers move their purchases to the
Internet, we're continuing to see a remarkable shift in how software is
bought and sold. The Internet is clearly becoming the preferred medium for
digital content publishers. Digital River's complete outsourced e-commerce
solution is at the forefront of this sweeping trend. Our clients' growth is
proof of our success. We look forward to providing the same exceptional level
of service to NetSales' customers."
The acquisition will further extend the reach of Digital River's e-commerce
solution as well as increase the competitive advantage and revenue
opportunities for the company and its newly acquired clients.
"This is a strong acquisition for us in the software marketplace, as well as
for our financial performance going forward," said Perry Steiner, Digital
River's president. "This acquisition will be accretive to Digital River
beginning in the fourth quarter. We believe we can add the NetSales client
base onto the Digital River system without significant incremental
operational costs, thus augmenting the software division's previously stated
goal for profitability prior to amortization and depreciation in December of
2000.
"We are confident that our clients will be able to grow their businesses by
leveraging both the expertise and proven e-commerce system from a market
leader such as Digital River," said Bob Fraser, NetSales' Founder and
Chairman of the Board. "Our clients can be assured that Digital River will
provide an exceptional level of service."
ABOUT DIGITAL RIVER
Digital River (Nasdaq: DRIV) is the world's largest Commerce Service Provider
(CSP), providing over 7,500 companies with complete, outsourced B2B and B2C
e-commerce solutions. The Company's front-to-back e-commerce services include
site development and hosting, order and transaction management, system
integration, product fulfillment, e-marketing and customer service. Digital
River's clients include Fujitsu, 3M, Siemens, Hewlett Packard, Autodesk,
Adaptec, Block Financial, Staples.com, CompUSA, Fox Interactive and
Egghead.com. For more details about Digital River, visit the corporate web
site at www.digitalriver.com.
ABOUT NETSALES
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NetSales provides mid-sized companies with a full-service, managed e-business
solution. Founded in 1995, NetSales pioneered the e-commerce marketplace by
building solutions for the first e-commerce adopters. Today, clients use
NetSales products and services to fulfill and manage their e-business.
Through partnerships with Cap Gemini/Ernst & Young, Cisco Systems, Chase
Manhattan Bank, Wells Fargo Bank and Time Warner, NetSales offers companies
in a broad range of vertical industries the ability to see immediate returns
on their e-business investments. For more information, see www.netsales.com
or call (800) 222-7232.
DIGITAL RIVER IS A REGISTERED TRADEMARK OF DIGITAL RIVER, INC. ALL OTHER
PRODUCTS OR COMPANY NAMES MENTIONED ARE USED FOR IDENTIFICATION PURPOSES
ONLY, AND MAY BE TRADEMARKS OF THEIR RESPECTIVE OWNERS.
EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THIS PRESS RELEASE
CONTAINS FORWARD-LOOKING STATEMENTS, INCLUDING STATEMENTS CONTAINING THE
WORDS, "BELIEVES," "ANTICIPATES," "EXPECTS," "AND SIMILAR WORDS. SUCH
FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND
OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS
OF THE COMPANY, OR INDUSTRY RESULTS, TO DIFFER MATERIALLY FROM ANY FUTURE
RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH
FORWARD-LOOKING STATEMENTS. SUCH FACTORS INCLUDE, AMONG OTHERS: THE COMPANY'S
LIMITED OPERATING HISTORY AND VARIABILITY OF OPERATING RESULTS; COMPETITION
IN THE ELECTRONIC COMMERCE MARKET; AND OTHER RISK FACTORS REFERENCED IN THE
COMPANY'S PUBLIC FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.
-C- 2000 DIGITAL RIVER, INC. DIGITAL RIVER-REGISTERED TRADEMARK- IS A
REGISTERED TRADEMARK OF DIGITAL RIVER, INC.
