In a flurry of activity over the last nine months, Onvia has closed the deal on its latest acquisition of DemandStar, a business-to-government (B2G) site that links government agencies with vendors. In the deal, each share of DemandStar will be converted into a right to receive approximately 0.6 of a share of Onvia common stock under the Nasdaq symbol ONVI.
The move is expected to attract new small-business customers as Onvia expands its presence in the B2G space. Based on experience in the B2B space, we have learned that a regional approach serves small businesses most effectively, said Glenn Ballman, chairman and CEO of Onvia. Expanding the exchange to include B2G is the next step in growing this regional presence and fulfilling our mission of providing small businesses with new opportunities for growth.
In an attempt to refocus its resources and attract new agencies and subscribing suppliers, the Seattle-based company began outsourcing its computer hardware and software products business in late December 2000. Our model is based on signing government agency suppliers to subscriptions enabling them to receive government bids from the Onvia B2G exchange, added Michael Pickett, president and chief operating officer. Agency signings over the next few months are expected to ramp resulting in increasing subscription revenue during the second half of 2001. Their model had better work. At last glance, Onvia was trading under a dollar, down from almost sixty a year ago.
Onvia's corporate headquarters will remain in Seattle while the former headquarters for DemandStar in Plantation, FL will become an operations center for government sales, product development and agency support.