eScout Buying Commerce One Marketplace

Said consolidated operations to produce the world's largest B2B e-commerce marketplace

Tempe, AZ  December 19, 2002  eScout, an e-business solutions provider and e-marketplace operator, is buying the Commerce marketplace unit of Commerce One in a move that eScout said would create the world's largest B2B e-commerce marketplace.

The sale includes all three of Commerce's lines of business: marketplace operations, managed applications services (MAS) and content operations. Included in the assets of Commerce are its trading partner contracts (buyers and suppliers), interoperability agreements, hosting and managed services contracts, technology and equipment, and certain intellectual property.

The combined company will remain private and will be headquartered in Lee's Summit, Mo. As part of the transaction, Commerce One is increasing its equity ownership stake in eScout and will obtain a seat on eScout's board of directors. Other financial details of the deal were not disclosed.

The transaction is expected to close in the first quarter of 2003.

eScout said the deal would provide for more efficient operations through consolidation and that Commerce One and eScout customers will directly benefit from increased business services and access to a larger base of trading partners.

"The combination of Commerce's great clients, people and technology with our 25,000 customers, world-class service and fully-integrated purchasing solutions should provide both Commerce customers and our existing eScout customers with new business opportunities and services," said Alexander (Sandy) Kemper, CEO of eScout.

Commerce's marketplace currently connects 38 Fortune 2000 buying organizations with more than 1,500 suppliers. In the first three quarters of 2002, Commerce reported processing nearly 900,000 purchase orders and transactions involving over $1.5 billion of spend. Commerce's MAS business provides hosting services to enterprises in North America seeking to outsource the management and maintenance of Commerce One applications. The content operations business has a library of more than 20 million catalog items and processed over 278 million stock-keeping units (SKUs) for clients in the first three quarters of 2002.

Mark Hoffman, chairman and CEO of Commerce One, said that the deal would allow his company to focus its efforts on its Web services-based solutions. He also pointed to benefits for Commerce One clients. "Our customers will continue to have easy access to thousands of e-commerce ready trading partners through eScout, allowing them to realize the benefits of online trading immediately," he said, adding, "Customers will also benefit from the breadth of services offered by the combination of the two marketplaces."