Combined company to deliver supply management solutions
Malvern, PA, and Rockville, MD — July 20, 2004 — Verticalnet Inc., a provider of strategic sourcing and supply management solutions, this week announced that it completed a merger to acquire B2eMarkets Inc., a privately-held provider of strategic sourcing software solutions.
The combined company, which as of today operates under the Verticalnet name, brings together Verticalnet's spend analysis and advanced sourcing solutions with B2eMarkets' e-sourcing suite, including strategy formulation, negotiation management, contract management and compliance, and performance management software.
In the merger transaction, effective yesterday, Verticalnet issued 5,100,000 shares of common stock and delivered a promissory note in the principal amount of $5,925,603. The note is convertible into 2,949,204 shares of Verticalnet common stock, subject to approval by Verticalnet's shareholders.
Verticalnet and B2eMarkets have initiated their integration plans, focusing on the sales, marketing, product development and administrative functions. Customer delivery organizations focused on product development, consulting services, software implementation, and customer support remain intact, in order that current Verticalnet and B2eMarkets customers will experience consistent support and an enhanced set of choices going forward, the integrated company said.
The integrated company will retain the leadership teams of both companies. Nathanael Lentz will remain president and CEO of Verticalnet. Orville Bailey, formerly president and CEO of B2eMarkets, will be the company's executive vice president of Corporate Strategy and Business Development, with responsibility for product strategy, business development, marketing, and channels.
The combined company will continue with all existing product and client deliveries as planned, according to information that was released yesterday. B2eMarkets' and Verticalnet's products will continue to be supported, and terms and conditions of professional services and product support agreements are unchanged and remain in effect.
The companies noted that the combination of B2eMarkets and Verticalnet creates a company with increased scale from a financial, customer and product standpoint. B2eMarkets generated approximately $8.1 million in revenues in the year ended December 31, 2003.
Additionally, having been partners for the past six months, the companies have worked closely together in go-to-market efforts and in joint product planning. Verticalnet and B2eMarkets have several common customers, have recently been jointly selected in multiple competitive sales processes, and are targeting their first integrated release for late summer.
"Identifying and achieving maximum supply savings requires enterprises to improve visibility, alignment and control of processes and data across the entire sourcing lifecycle," said Tim Minahan, vice president of Supply Chain Research at Aberdeen Group. "The combination of Verticalnet and B2eMarkets links together a broad supply management solution that addresses the complete supply management lifecycle — from initial spending analysis and strategy development through advanced sourcing decision support and compliance management."
Bailey, the combined company's new executive vice president of Corporate Strategy and Business Development, said, "We see this merger as a natural progression of the partnership that we have had with Verticalnet. I am excited to be a part of the Verticalnet leadership team and about what this merger means for our customers, employees and investors."