Riverdeep signs distribution agreement with UK firm RM

Riverdeep, the Nasdaq-quoted educational software company, has signed a contract, estimated to be worth $15-$20 million, with UK company RM (Research Machines) to distribute its products through RM's network in the UK. The contract, Riverdeep's biggest to date, could be worth up to $20 million (€20.66 million) over the next six years. The precise financial terms of the contract will be disclosed today.

RM is Britain's largest hardware, software and Internet service provider (ISP) to the UK schools market. Under the arrangement, Riverdeep will license its flagship "Destination Math" interactive learning product to RM for distribution in Britain.

This is Riverdeep's first entry into the UK market, and is a little ahead of schedule.

It is understood it will cost Riverdeep around £700,000 (€888,000) to customise the product for the UK curriculum. It will be available in Britain within months.

In return, RM will now license its "Living Library" Internet content service through Riverdeep for the US market. No minimum quota figures have been agreed with Riverdeep for distributing the product in the US. RM's product was already available in the US through CCC, a Riverdeep competitor, but it is understood to have approached Riverdeep to distribute the product through its online model.

The RM deal had little effect on Riverdeep's share price in mid-session trading. On the US Nasdaq, it was down 87 cents at $17.87. The company is currently trading below its initial March offer price of $20.

Riverdeep yesterday rejected speculation about a possible acquisition of US company Brainchild Incorporated.

Mr Barry O'Callaghan told The Irish Times that Riverdeep had had just two conversations with Brainchild Incorporated and there was no substance to any speculation about it being an acquisition target. He added that the company would be very far down the list of Riverdeep's potential acquisitions.