Acquisition Adds eMarketplace for Surplus Equipment and Inventory
To FreeMarkets(R) B2B eMarketplace
PITTSBURGH, March 15 /PRNewswire/ -- FreeMarkets, Inc. (Nasdaq: FMKT), the
world's leading B2B eMarketplace, today announced that it has signed a
definitive agreement to acquire iMark.com, Inc., a privately-held
business-to-business online marketplace for surplus equipment and inventory
based in Austin, Texas. The FreeMarkets(R) Online Asset Marketplace and the
iMark.com Internet marketplace will be combined to form the FreeMarkets
Surplus Asset eMarketplace, which will feature a global network of buyers and
sellers that includes over 20,000 registered users, $265 million in posted
assets and over $28 million in asset sales to date.
Under the terms of the agreement, 1,750,000 shares and options to acquire
shares of FreeMarkets common stock will be exchanged for all outstanding
shares, options and warrants in iMark.com. The acquisition will be accounted
for as a purchase and is expected to close by March 31, 2000. At closing,
which is subject to customary conditions, iMark.com will become a wholly-owned
subsidiary of FreeMarkets. The definitive agreement has been unanimously
approved by both companies' boards. Shareholders owning approximately 88% of
iMark.com's capital stock have agreed to vote in favor of the transaction.
The acquisition positions FreeMarkets as a leader in the emerging B2B
online surplus asset space. Industry analysts estimate that the worldwide
market for surplus equipment and inventory is approximately $300 billion
annually. FreeMarkets' client base of large purchasing organizations
generates substantial amounts of surplus equipment and inventory. Today, most
of these assets are sold offline. This acquisition enhances FreeMarkets'
ability to leverage its client base as large industrial companies increasingly
turn to the Internet to sell their surplus equipment and inventory.
"Global 1000 clients who use our B2B eMarketplace for purchasing also have
the need to sell surplus equipment and inventory," said Glen Meakem, chairman
and CEO of FreeMarkets. "Our unique combination of auction technology and
market making services addresses this need and creates a powerful network
effect. By teaming with iMark.com, we can leverage our overall market
position and blue-chip client relationships, as well as iMark.com's top-tier
management, expertise in online asset recovery, best-in-class, patent-pending
technology and range of value-added asset recovery services, to capitalize on
this enormous market opportunity."
"We are pleased to be joining the FreeMarkets team," said Brian Magierski,
co-founder and CEO of iMark.com. "FreeMarkets is the leading B2B eMarketplace
and we are excited about becoming a part of it. We believe that buyers and
sellers of surplus assets will benefit from the enhanced liquidity and value
that this combination will provide."
Features of the FreeMarkets Surplus Asset eMarketplace will include:
-- Full-Service Auctions. Real-time, Web-based auctions, along with
market making services such as detailed specification of posted assets
and buyer research and recruitment.
-- Self-Service Exchange. A 24x7 Web exchange where sellers will be able
to post surplus equipment and inventory, and buyers will be able to
view and compete to purchase this equipment and inventory. Buyers and
sellers will be able to communicate and close deals according to
flexible time tables.
-- FreeMarkets Surplus Asset Portal Solution. Web technology that will
allow FreeMarkets to create co-branded web portals for surplus
equipment and inventory on behalf of large and medium-sized businesses
as well as governmental organizations. Sellers will be able to post
surplus equipment and inventory on their own portals for efficient
transfer within their own organizations. These postings can also be
mirrored to the FreeMarkets Surplus Asset eMarketplace.
-- Value-added services, including leasing services, transportation and
rigging services and investment recovery services.
-- Complete customer support required to successfully manage the trading
of high-value surplus equipment and inventory, including technical
operations, market making services and call center support to buyers
and sellers in over 30 languages.
The 70-person iMark.com team will join the FreeMarkets asset marketplace
team. The FreeMarkets Surplus Asset eMarketplace will be headed by Mr.
Magierski, who has been named a vice president of FreeMarkets. Douglas
Hibberd, iMark.com's chief technology officer has also been named a vice
president of FreeMarkets.
iMark.com launched its website in September 1999 and did not generate
material revenues in 1999. The combination is expected to add to FreeMarkets'
revenues and anticipated cash losses in 2000 and to result in one-time
non-cash charges in the first quarter of 2000, as well as substantial ongoing
non-cash charges related to the amortization of the goodwill associated with
the purchase.
About FreeMarkets
FreeMarkets is the world's leading B2B eMarketplace, with online auction
markets for industrial parts, raw materials, commodities and services. The
Company created online auctions for over $2.7 billion worth of purchase orders
in 1999 and nearly $1.0 billion worth of purchase orders in 1998. Since 1995,
FreeMarkets has created online auctions for products in more than 70 supply
verticals, including injection molded plastic parts, commercial machinings,
metal fabrications, chemicals, printed circuit boards, corrugated packaging
and coal. More than 3,000 suppliers from over 45 countries have participated
in the FreeMarkets B2B eMarketplace. FreeMarkets provides access to its
eMarketplace to industrial buyers and suppliers. The FreeMarkets B2B
eMarketplace includes industry-leading online auction technology, technical
operations, market making services, access to a global database of suppliers
and supplier research, call center support to buyers and suppliers in over
30 languages, and marketplace rules. The Company's current clients include
The Commonwealth of Pennsylvania, United Technologies Corporation, The Quaker
Oats Company, Owens Corning, Eaton Corporation, Emerson Electric Company,
FirstEnergy Corp., SmithKline Beecham plc, Navistar International and Delphi
Automotive Systems Corporation. FreeMarkets can be found on the Web at
http://www.freemarkets.com. FreeMarkets is a registered trademark of FreeMarkets,
Inc.
About iMark.com
iMark.com is a business-to-business Internet marketplace for the exchange
of used equipment. iMark.com brings together buyers and sellers in a fair and
neutral marketplace, and offers services associated with buying and selling
equipment, including Leasing Services, Transportation & Rigging Services, and
Investment Recovery Services. iMark.com improves the speed and efficiency of
the used equipment market. iMark.com ActiveLead(TM) for sellers and iMark.com
ActiveSearch(TM) for buyers can reduce the sales cycle from several months to
a few days. iMark.com serves Fortune 1000 companies, large and small
manufacturers, OEMs, leasing companies and used equipment dealers -- anybody
with an interest in finding or selling used equipment. iMark.com can be found
on the Web at http://www.imark.com.
Forward-looking statements
Statements in this press release that are not historical facts, including
those statements that refer to FreeMarkets' plans, prospects, expectations,
strategies, intentions, hopes and beliefs, are forward-looking statements.
These forward-looking statements are based on information available to
FreeMarkets today, and FreeMarkets assumes no obligation to update these
statements as circumstances change. There are risks and uncertainties that
could cause actual results to differ materially from the forward-looking
statements, including, without limitation, market acceptance of our online
auction marketplace, the competitive nature of the market for
business-to-business online auction services, FreeMarkets' ability to retain
and increase revenue from existing clients and to execute agreements with new
clients, FreeMarkets' ability to attract and retain qualified personnel, the
size of the market for used equipment and surplus inventory, the demand for
online auction and other asset recovery services by buyers and suppliers, and
FreeMarkets' ability to successfully integrate iMark.com. Risk factors are
described in more detail in FreeMarkets' prospectus dated December 9, 1999,
which is included as part of its Registration Statement on Form S-1, filed
with the Securities and Exchange Commission.
CONTACT: Karen Kovatch of FreeMarkets, 412-297-8767, or
kkovatch@freemarkets.com
SOURCE FreeMarkets, Inc.
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Related links:
http://www.imark.com
http://www.freemarkets.com
CONTACT:
Karen Kovatch of FreeMarkets, 412-297-8767,
or kkovatch@freemarkets.com
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