FreeMarkets Announces Definitive Agreement to Acquire Surplus Record and SR Auction

Acquisition Will Add Established Surplus Asset Dealer Network and Directory

And Online Surplus Asset Trade Site to FreeMarkets(R) Surplus Asset


Mar 22, 2000, 00:00 ET from FreeMarkets, Inc.

    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, 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
     --   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  FreeMarkets is a registered trademark of FreeMarkets,
     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,, 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

SOURCE FreeMarkets, Inc.