eScout and Perfect Commerce Announce Merger Agreement

Merged company to provide on-demand supplier relationship management solutions

Merged company to provide on-demand supplier relationship management solutions

Lee's Summit, MO, and Palo Alto, CA — July 16, 2003 — eScout LLC and Perfect Commerce Inc. today announced that the two companies have entered into a definitive agreement to merge, creating an on-demand supplier relationship management (SRM) solutions company.

Under the terms of the agreement, shareholders of Perfect Commerce will receive newly issued shares of stock from the company. The merger is expected to close during the third quarter of the calendar year 2003.

eScout's current chairman and CEO, Sandy Kemper, will remain the chairman and CEO, while the current president and CEO of Perfect Commerce, James McCormick, will become the president and chief operations officer of the combined company.

The company will remain privately held and headquartered in Lee's Summit, Mo., with corporate offices in Palo Alto and San Diego, Calif., as well as in Las Vegas, Nev. The company's sales offices are located in major cities across the United States.

eScout and Perfect said the combined company is positioned to grow its share of the multi-billion dollar SRM market. In the first half of 2003 the two companies' solutions handled over 1.8 million transactions with dollar volumes reaching nearly $1.9 billion. The combined company will have a network of thousands of buyers and suppliers, including over 100 Global 2000 companies and more than 7,500 of their strategic suppliers.

"The combination of Perfect's sourcing solution with eScout's procurement and payment solutions will enable us to increase our product offering to our existing client base as well as prospects," said McCormick. "Already, we have interest from our existing clients in the combined companies' solutions. Both our companies were led to this combination by our desire to more fully satisfy our clients' needs," concluded McCormick.

"Consolidation has been very active in e-procurement and exchanges," said Pierre Mitchell of AMR Research. "eScout promotes an agnostic buyer-system architecture that allows different e-procurement on-ramps to connect to the exchange," said Mitchell. Referencing a recent study of supply management executives, he added that, "Eighty percent of those executives faced new cost or price reduction responsibilities, and 71 percent are having those responsibilities significantly increased. The bottom line is that procurement has come front and center for delivering bottom-line impact," concluded Mitchell.