Dublin-based educational software firm Riverdeep has agreed terms to acquire Broderbund, a publisher of e-learning products for the consumer sector, for $57.2 million (€58.3 million).
The acquisition will be funded through a mixture of cash-on-hand and a new $50 million debt facility organised by Riverdeep, which plans to integrate Broderbund's products into its software.
Broderbund, a subsidiary of the Gores Technology Group, owns a number of prominent software brands including Print Shop, Print Master, Family Tree Maker, American Greetings, Calendar Creator and Cosmopolitan.
Mr Barry O'Callaghan, chairman and chief executive of Riverdeep, said the acquisition of Broderbund's established brands would fit its school and consumer businesses.
This is the second acquisition by Riverdeep of a company owned by the Gores Technology Group in a year. Last September the firm issued $40 million in stock and assumed $20 million in debt to acquire the education division of The Learning Company.
The remainder of The Learning Company, which was not acquired by Riverdeep, was rebranded Broderbund at that stage. As part of the earlier acquisition, Broderbund formed a services and distribution agreement with Riverdeep before Riverdeep agreed yesterday to take over the firm and reintegrate its operations into the group.
About 275 staff work for Broderbund. Riverdeep said there were no plans for any cuts.
Riverdeep has arranged the new $50 million senior debt line with Foothill Capital Corporation, a subsidiary of Wells Fargo. Riverdeep currently has about $67.5 million in cash-at-hand, said analysts.
Shares in Riverdeep slipped almost 5 per cent to $15.68 on the Nasdaq yesterday on news of the acquisition. But analysts generally welcomed the deal.
Ms Bernie Lardiner, technology analyst with Davy Stockbrokers, said the deal made sense because of Riverdeep's strong cash position and its desire to strengthen its consumer software business.
Riverdeep moved into profit last year for the first time since its foundation in 1995, the group reported earlier this month.
The firm, which develops school-age interactive learning solutions mainly for the US market, reported a net profit of $8.77 million for the year to the end of June after allowing for a $4.1 million restructuring charge and $10.6 million in amortisation of non-current assets.
Sales more than trebled over the year to $169.25 million from $51.6 million a year earlier. For the last quarter, net profit was $7.7 million on sales of $51.88 million.
