Digital River, Inc
) recently announced that it is set to acquire LML Payment Systems
Inc. for $3.45 per share or $108.2 million.
LML Payment Systems offers financial payment solutions including
credit card processing, online debit, electronic funds transfer,
automated clearinghouse payment processing and authentication
services to e-commerce and traditional businesses.
The company also provides selected transactions to third-party
processors and banks for authorization and settlement.
Management believes that the acquisition will complement the
company's existing product portfolio and will enable Digital River
to offer its online payment services to businesses of all
Currently, Digital River provides online payment processing
services to enterprises and mid-sized merchants while LML Payment
Systems processes online payments for more than 14,000 small to
Post acquisition, Digital River will handle online transactions
worth more than $20 billion for numerous companies across a broad
range of industries such as software, consumer electronics,
government, utilities, event registration and mobile
In addition, Digital River plans to leverage LML Payment
Systems' ecosystem of banking, merchant, reseller and developer
relationships to expand its world payment solutions and further
extend LML's white label channel solution and mobile payments
Digital River expects to complete the transaction by the fourth
quarter of 2012 or the first quarter of 2013. The acquisition is
expected to be accretive to the bottom line in 2013.
The acquisition has been approved by the respective boards of
both companies and will be completed through a plan of arrangement
under the Business Corporations Act (British Columbia).
We continue to maintain our long-term Neutral recommendation on
Digital River. However, we currently have a Zacks #4 Rank, which
translates into a short-term rating of Sell.
DIGITAL RIVER (DRIV): Free Stock Analysis
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