Verticalnet Acquires UK Independent Sourcing Software Provider

Acquisition to broaden Verticalnet's ability to support European, global clients

Malvern, PA and Guildford, United Kingdom July 25, 2005 Verticalnet Inc., a provider of supply management solutions, today announced that it has acquired Digital Union Limited, a privately held provider of on-demand sourcing and procurement solutions based in Guildford, Surrey, United Kingdom.

The acquisition brings Verticalnet's supply management solutions together with Digital Union's procurement and auction capabilities.

Digital Union, one of the largest independent sourcing software providers in the UK, was founded in 1998. It has customers in multiple geographies, including Europe and North America. Some of its customers include Kidde, Petro Canada, Safeway, Sunseeker, Tesco and the WorldWide Retail Exchange (WWRE). The WWRE, in particular, uses Digital Union's auction platform for its global retailer clients to conduct thousands of auction events per month, representing billions of dollars of spend.

"With solutions designed by and for more than thirty-five global retailers and their trading partners, Digital Union has been an anchor technology provider and strategic partner of the WorldWide Retail Exchange," said Maureen Phillips-Houser, WWRE's Vice President of Sourcing Solutions.

Digital Union products are architected on IBM technology and utilize IBM's WebSphere Commerce Server as a critical technology component enabling both scalability and ease of integration. The Digital Union and IBM relationship currently spans Europe and is expected to expand in the United States through the use of Verticalnet's U.S. sales and marketing resources.

"Our members have conducted and saved several billion dollars in sourced volume across the Digital Union Platform, enabling tens of thousands of suppliers to drive cost and time optimized sales revenues," continues Phillips-Houser. "We believe that Digital Union's combination with Verticalnet marks a very positive development for our business, opening up a broader solutions portfolio, deeper local support in the United States and world-class services. We are confident that Verticalnet's acquisition of Digital Union will significantly enhance our already successful relationship and value proposition to our member base."

The Digital Union acquisition is effective as of July 22, 2005. Digital Union will be operated as a Verticalnet company initially under the Digital Union brand. Verticalnet and Digital Union will continue with all existing product and client deliveries as planned. Both companies' products will continue to be supported and enhanced and the terms and conditions of all professional services and product support agreements will remain in effect unchanged.

The Digital Union leadership team will remain with Verticalnet. Patrick (Paddy) Lawton, founder of Digital Union, will be the President of Verticalnet Europe, a business division of Verticalnet focused on business growth throughout Europe. Other members of the Digital Union executive team will provide key roles throughout the combined organizations.

Nathanael Lentz, President and CEO of Verticalnet, said, "Digital Union has a recognized brand and high profile relationships in both the UK and Europe, which should enable Verticalnet to accelerate its current efforts to become a global supply management leader. In addition, its strong relationships with both IBM and the WorldWide Retail Exchange are a tribute to Digital Union's proven ability to establish win-win partner relationships."

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