Online Resources To Buy PrincetoneCom
CHANTILLY, Va. - (05/09/06) The shake-out in e-commercecontinued Monday with Online Resources Corp. announcing a deal toacquire once high-flying electronic bill payment service providerPrinceton eCom. The purchase price is $180 million in cash with anearnout of $10 million. Online Resources plans to pair PrincetoneCom with its own bill payment business. The combined company willserve 2,200 financial institutions and 1,600 billers, more clientsthan any other bill payment processor, according to OnlineResources. Princeton eCom, based in Princeton, N.J., was one of thefirst companies out of the box with an electronic bill payment andpresentment service for financial institutions and they signedseveral major credit unions clients early on, including U.S.Central CU, Mid-Atlantic Corporate FCU and Wescom CU. But thecompany has never reported a fiscal-year profit, wracking up totallosses of more than $60 million over the past five years. The dealhas been approved by three venture firms that control PrincetoneCom, Mellon Ventures, LP, Conning Capital Partners and LazardTechnology Partners II LP. Online has obtained a commitment fromTennenbaum Capital Partners, LLC to fund its acquisition ofPrinceton under which Online will issue to Tennenbaum $85 millionof senior secured notes and $75 million of convertible preferredstock.