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FOR IMMEDIATE RELEASE
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Contacts:
Public Relations Investor Relations
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Paula Wheeler Aimee Thompson Jim DeYoung
Peapod, Inc. or Edelman Public Relations Winston Partners
(847) 583-6412 (312) 297-7021 (312) 855-0439
PEAPOD ACQUIRES STREAMLINE.COM, INC.'S OPERATIONS
IN TWO KEY MARKETS
Exits Texas and Ohio; Announces Plans to Enter Baltimore-Washington
Chicago, September 7, 2000 - Peapod, Inc. (NASDAQ: PPOD) today announced that it
has acquired Streamline.com, Inc.'s (NASDAQ: SLNE) operations in Chicago and
Washington, D.C., and that it will exit from the Texas and Ohio markets. These
actions are part of Peapod's overall strategic plan for growth and future
profitability, including its plans to use a centralized distribution model in
every market in which it offers online shopping and delivery service.
Under the purchase agreement with Streamline, Peapod will pay approximately $12
million in cash for the operating assets comprising Streamline's operations in
the Chicago and Washington, D.C., markets, including the facilities, an
established customer base and an existing workforce and management. Peapod will
also assume the capitalized lease obligations associated with the purchased
assets. The acquisition of Streamline's Washington, D.C., operations, will allow
Peapod, working with a retail subsidiary of Royal Ahold, to begin offering
service under the Peapod brand in the Baltimore-Washington area as soon as the
fourth quarter of 2000, earlier than originally planned. As part of the
acquisition, Peapod will assume the lease of the centralized distribution center
located in Gaithersburg, Md., from which Peapod will fulfill its orders. Peapod
will also take over operations of the Chicago facility, located in Lake Zurich,
Ill.
"As Peapod's immediate growth focus is along the East Coast and in Chicago, we
have taken a major strategic step by purchasing Streamline's Chicago and
Washington, D.C., operations and by exiting Texas and Ohio," said Marc van
Gelder, president and chief executive officer of Peapod. "This acquisition will
speed our time-to-market entry in the Baltimore-Washington market and provide
state-of-the-art facilities, including expansion space for our Chicago
operations."
"Peapod's expansion along a centralized distribution model, a highly scaleable
model that promotes fast, accurate and efficient picking and packing of our
customers' orders, better positions us to build a profitable business as we
continue to provide our customers with a high-quality, convenient service," van
Gelder continued.
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As part of its focused market strategy, Peapod will exit Columbus, Ohio and
three markets in Texas - Houston, Austin and Dallas - by September 15. Customers
in Columbus and Texas will still be able to take advantage of Peapod's national,
non-perishable delivery service, "Peapod Packages."
These actions complete Peapod's exit from an in-store picking model and the
Company's conversion to its centralized distribution model. This centralized
model employs formats for both large and smaller markets: free-standing
warehouse facilities and smaller, fast-pick fulfillment centers.
At the end of June 2000, Royal Ahold, a leading international food provider,
acquired a 51% equity interest in Peapod. Peapod is now capitalizing on several
elements of this Ahold relationship that it considers key to its future growth
plans. In addition to leveraging Ahold's strong retail brands along the East
Coast, Peapod has entered into a supply and services agreement with Ahold that
enables Peapod to purchase products more efficiently, an important competitive
advantage. In June of this year, Peapod worked with Ahold-owned Stop & Shop to
open service in southern Connecticut.
Founded in 1989, Peapod, Inc., "Your Personal Grocer & More," is a leading
Internet grocer, providing consumers with broad product choices for local and
national delivery service. Peapod is also a provider of targeted media and
research services to consumer packaged goods companies, offering its unique
medium for targeting promotions and advertising at the point of purchase and
conducting cost-effective research. The Company's shares trade on the NASDAQ
under the symbol "PPOD."
Except for historical matters contained herein, the matters discussed in this
press release, including statements herein regarding Peapod's expansion
strategy, its market positioning and its future prospects and profitability are
forward-looking and are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Investors are cautioned that
these forward-looking statements reflect numerous assumptions and involve risks
and uncertainties that may affect Peapod's business and prospects and cause
actual results to differ materially from these forward-looking statements.
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