Blackboard Inc., a privately held Washington online education company, spent $4.5 million in cash yesterday to buy a business that lets students use their identification cards to make discounted purchases from merchants.
Student Advantage Inc., an 11-year-old Boston college discount firm, sold its SA Cash unit as part of a spinoff strategy. The firm received a delisting notice from the Nasdaq Stock Market in December and is seeking to sell the rest of the company. It went public in 1999 but has had only one quarter of profitability.
"They already had developed the technology and the knowledge," said Michael L. Chasen, Blackboard's chief executive. "To be able to bring the technology to market quicker . . . it was very much worth it to purchase SA Cash and bring it into the Blackboard program."
Student Advantage operates Web sites and programs that allow college students to get price breaks from restaurants, entertainment venues and travel providers. It has agreements with more than 1,000 higher-education organizations and 15,000 merchants.
Blackboard, known largely for e-learning software that helps instructors put course material on the Web, has been trying to extend its reach to other facets of college life. The company created its own identification card transaction system for on-campus purchases and security access in 2000.
The acquisition gives Blackboard a technology platform to connect with off-campus merchants, including terminals that scan identification cards and deduct funds from student accounts. Blackboard will take over contracts with the 24 universities currently using SA Cash, add 14 new employees and an establish an office in Boston.
"This acquisition just reinforces Blackboard's role. It really kind of helps establish Blackboard as the infrastructure for campus and will be a big part of our story going forward," Chasen said.
Yesterday, Student Advantage said it reduced a Jan. 31 payment to $1.5 million from $3.5 million to one of its creditors, Reservoir Capital Partners. Shares of Student Advantage rose 2 cents to close at 26 cents.