PITTSBURGH, March 22 /PRNewswire/ -- FreeMarkets, Inc. (Nasdaq: FMKT) the world's leading B2B eMarketplace, today announced that it has signed a definitive agreement to acquire the assets of Surplus Record, Inc. and SR Auction, Inc. Surplus Record and SR Auction, privately held companies based in Chicago, IL, comprise a directory and network of dealers and buyers and an online surplus asset trade site for business surplus, new and used industrial equipment, machinery, and machine tools. The acquisition further strengthens FreeMarkets' position as a leader in the emerging B2B online surplus equipment and inventory space. Industry analysts estimate that the worldwide market for surplus equipment and inventory is worth $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. Surplus Record brings 76 years of experience in the surplus asset marketplace and a network of thousands of dealers, end-users and listings to the FreeMarkets Surplus Asset eMarketplace. The acquisition of Surplus Record and SR Auction follows FreeMarkets' recent announcement of its agreement to acquire iMark.com, a leading business-to-business online marketplace for asset recovery. By combining Surplus Record's surplus asset listings with the technology, market making and value-added services offered through the FreeMarkets Surplus Asset eMarketplace, FreeMarkets will create greater liquidity for buyers and sellers of surplus equipment and inventory. "Surplus Record has a world-class reputation among dealers and end-users and over 76 years of industry experience, and SR Auction provides an online site through which dealers can trade surplus assets," said Glen Meakem, chairman and CEO of FreeMarkets. "FreeMarkets has always blended the best of technology with a deep understanding of the markets we serve and a desire to deliver significant value to our clients. Our acquisition of Surplus Record and SR Auction is an extension of that philosophy. We are thrilled to extend our best-in-class offering to dealers, empowering them with easy-to-use technology to deliver substantial results to their bottom line." With the addition of Surplus Record and SR Auction, the FreeMarkets Surplus Asset eMarketplace will provide enhanced liquidity and reach to buyers and sellers of surplus assets. The site will feature: -- Nearly 200,000 dealers and end-users -- Over 50,000 listings for assets worth more than $750 million -- Advanced web-based technology platform and applications for efficiently managing and trading surplus across multiple Web sites including corporate intranets, vertical marketplaces and other exchanges -- Online and offline listing partnerships for maximum exposure -- Value-added services such as leasing, transportation, rigging, storing, refurbishing and investment recovery -- A track record of over $30 million in online sales to date "We are pleased to be joining the FreeMarkets team," said Tom Scanlan, President of Surplus Record and SR Auction. "FreeMarkets understands that technology, in concert with a robust dealer network and other value-added services, delivers maximum value to manufacturers. We look forward to combining our experience and dealer network with FreeMarkets' asset recovery offerings and client base to achieve significant benefits for our user and dealer community." Under the terms of the agreement, FreeMarkets will acquire Surplus Record and SR Auction for $18 million in cash. The acquisition will be accounted for as a purchase and is not expected to have a material impact on FreeMarkets' 2000 results. At closing, the assets and employees of Surplus Record and SR Auction will become part of a wholly owned subsidiary of FreeMarkets, and will be integrated with the FreeMarkets Surplus Asset eMarketplace group. The Boards of FreeMarkets, Surplus Record and SR Auction have unanimously approved the transaction, and holders of all of the shares of Surplus Record and SR Auction have agreed to vote in favor of the transaction. Closing, which is subject to customary conditions, is expected to occur in the second calendar quarter of 2000 or sooner. 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 Surplus Record and SR Auction Surplus Record, Inc., founded in 1924 and the world's largest independent monthly directory (816 pages) of used and surplus machinery and equipment, operates the Internet's most visited online used machinery and equipment classified Web site, www.surplusrecord.com, through SR Auction, an industry-specific vertical auction site. The Web site, launched in 1995, has over 50,000 listings valued in excess of $500 million updated daily by more than 1,000 suppliers. Surplus Record also publishes the Surplus Record, a monthly directory with a worldwide circulation of more than 140,000. Surplus Record is an exclusive publishing entity not affiliated directly or indirectly with any association, corporation or individual buying and/or selling machinery and equipment. 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 acquisitions. Risk factors are described in more detail in FreeMarkets' filings with the Securities and Exchange Commission. For further information, contact Karen Kovatch of FreeMarkets, 412-297-8767, or firstname.lastname@example.org
SOURCE FreeMarkets, Inc.