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Munich, Stuttgart, Düsseldorf, April 20, 2004 - element 5 AG, leading supplier in electronic software distribution in Europe and Asia, was acquired by Digital River, Inc. (NASDAQ: DRIV), the U.S. market leader in electronic software distribution. element 5 with headquarters in Cologne, Germany, was founded in 1996 and received financing from venture capital firms: Earlybird, 3i and IKB Private Equity. Digital River paid $120 million in cash. Digital River also may pay up to an additional $2.5 million in cash based on element 5's operating performance over the first 24 months subsequent to the acquisition.
The initial institutional early-stage financing round was funded by Earlybird and 3i in December 1999. In a second round of financing in December 2001 IKB Private Equity GmbH joined as third institutional investor.
element 5 offers software publishers e-commerce solutions and marketing services. Software publishers integrate the Web-based solution in order to sell their products worldwide over the Internet and through channel partners. This still young market is expected to grow with a highly over proportional growth rate for the years to come. More than 10,000 software publishers in more than 150 countries use element 5's e-sales solution in over two million transactions annually. Customers include Abbyy, Business Objects, Copernic, CyberLink, Data Becker, Executive Software, F-Secure, Ipswitch, Kaspersky Labs, Lavasoft, palmOne, Steinberg, Toshiba, Ulead, and Zonelabs.
element 5 supports 11 languages worldwide as well as all major currencies and payment methods. The company is represented globally with locations in the United States, the UK, Germany, France, Italy, Sweden, Israel, Japan and Singapore. In establishing the market leadership in electronic software distribution in Europe and Asia, element 5 AG perfectly fits to the US market leader Digital River Inc.
Christian Siegele, Investment Director at 3i sees 3i’s strategy confirmed. „We were impressed by the management team from the early beginning, the commitment and the inventiveness of Gerrit Schumann and his team were the foundation for the rapid growth of element 5. 3i’s global network helped to develop and to realize the full value of the companies potential.“
Hendrik Brandis, Managing Partner at Earlybird and the investors´ representative on the Board of element 5 sees the entry of Digital River as proof of the investment strategy of the venture investors: “This transaction reflects Earlybird´s portfolio strategy to invest in excellent German and European technology companies, add value to their international growth and combine them with an international market leader for future success. With this element 5 realizes the vision we had at our initial investment.”
Olav Wilms, Senior Investment Manager and Exit-Manager at IKB Private Equity GmbH adds: „This exit shows once again the competitiveness of German technology companies in international markets.“
About Earlybird:
Earlybird is an international venture capital fund with approximately $300 million under management and an investment focus on Healthcare, IT and Technologies. With offices in Europe (Hamburg, Munich) and the US (Palo Alto), Earlybird is well positioned to take advantage of international opportunities and to assist its portfolio companies in gaining access to the international market place and financial resources.
For further information, please contact:
Daniela von Wedel
Van-der-Smissen-Str. 3
22767 Hamburg
Germany
Tel.: +49-40-4329 41-0
Fax: +49-40-4329 41-29
vonwedel@earlybird.com
Marianne Winkler
525 University Avenue, Suite 410
Palo Alto, CA 94391, USA
Tel: +1-(650)-330 3633
Fax: +1-(650)-330 3634
winkler@earlybird.com
About 3i:
3i brings capital, knowledge and connections to the creation and development of businesses around the world. It invests in a wide range of opportunities from start-ups to buy-outs and buy-ins, focusing on businesses with high growth potential and strong management.
3i invests in businesses across three continents through local investment teams in Europe, Asia Pacific and the USA. To date, 3i has invested over £15 billion (including co-investment funds).
Additional information regarding 3i can be found at http://www.3i.com
For further information, please contact:
Thomas Paul
3i Deutschland GmbH
Bockenheimer Landstr. 55
60325 Frankfurt
Tel.: +49 (69) 710000 17
Fax: +49 (69) 710000192
thomas_paul@3i.com
About IKB Private Equity:
IKB Private Equity GmbH, a 100% subsidary of IKB Deutsche Industriebank AG, provides Mittelstand-companies with equity and mezzanine capital, in form of direct investments, silent partnerships and participation rights. IKB Private Equity in cooperation with IKB Group and its vast network of partners assists its clients in an array of strategies, from expansion strategies to leveraged buy-out transactions for succession plans. As of the end of March 2004 IKB Private Equity has invested an amount of EUR 341 millions in 89 companies.
Additional information regarding IKB Private Equity can be found at http://www.ikb-pe.de
For further information, please contact:
Kerstin Ueberall
Wilhelm-Bötzkes-Str. 1
40474 Düsseldorf
Tel: +49-211-8221-4041
Fax: +49-211-8221-2041
kerstin.ueberall@ikb.de
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