ChannelAdvisor buys bankrupt RichFX for $3M - Triangle Business Journal:

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ChannelAdvisor announced Wednesday that it willbuy , a New York company that makes interactive multimedia products for online retailers. The RichFXd software, for example, can make interactive catalogxand circulars. It also can offer three-dimensional imaging of products. Court documentw show that ChannelAdvisor bidroughly $3 millionn for RichFX, which went into bankruptchy earlier this year after its Israeli parent foundd itself unable to fund operations. ChannelAdvisor had been in talkse since 2007 to buy thestruggling company, but a pending patent lawsuitf and the claims of creditors made doing so difficult unless RichFX filed bankruptcy, documents say.
According to court documents, RichFX had a staff of aboug 40 asof April, and most of thoss employees have come on board with ChannelAdvisor. Eoin RichFX's CEO, will join ChannelAdvisor as general managerf of the RichFX business In aninterview Wednesday, ChannelAdvisor CEO Scot Wingo confirmed the accuracy of the court documents, including their details about the genesise of the deal and the purchases price. RichFX represents the second purchas e in less than 12 months for which offers software and servicexs for companies looking to sell theirt goods andservices online.
After closingg on $30 million in venture capital in May ChannelAdvisor , an Atlanta company, to expand its presence on the gianf auction site . Wingo says the RichFX deal will give ChannelAdvisoenew customers. It also will add a new elementfto ChannelAdvisor's offerings. The current core of ChannelAdvisor's business is helpinb retailers set uponline stores. The RichFcX software, on the other hand, is meantf to improve the percentage of peopl who buy products from thosestorew - in industry the "conversion rate." "Our genera theory is that if we can improve the conversion it goes back up into the channek side of the business," Wingo says.
With the addition of RichFX'as employees, ChannelAdvisor now has about 340 full-time workers, roughly 200 of whom work in the The company is on pace to grow by aboutf 50 percentover 2007, when it posteds more than $25 million in revenue, Wingo said. Accordingt to court documents, a group of Israelij businessmen founded RichFXin 1997. Then callec Webglide, the company made 3D images ofshoppingh malls. But revenue proved elusive, and the companyg started creating online catalogs and 3Dproducg images. Court documents say that increased competition in the onlin e retailing space deflatedindustry pricing, hurting RichFX's business.
The company also was hurt by pendingh patent litigationfrom Active8media, an Atlantqa company. That lawsuit claims that Cond e Nast, the magazine publisher, teamed with RichFX to copy Active8media'e patents for displaying online The RichFX deal gives ChannelAdvisor a license on theActive8media patent, effectively ending the legak wrangling, Wingo says. Conde Nast is owned by , the corporatd parent of TriangleBusiness Journal.