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| Home > Corporate > News and
Events > FreeMarkets Announces Agreement to Acquire iMark.com
|
| FreeMarkets Announces Definitive Agreement to
Acquire iMark.com |
| Acquisition adds eMarketplace for surplus
equipment and inventory to FreeMarkets B2B eMarketplace
|
| PITTSBURGH, PA - March 15, 2000 -
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 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 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
ActiveLeadTM for sellers and iMark.com ActiveSearchTM 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 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. |
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