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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): November 16, 1999
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VERTICALNET, INC.
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(Exact Name of Registrant Specified in Charter)
Pennsylvania 000-25269 23-2815834
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(State or Other (Commission File (I.R.S. Employer
Jurisdiction of Number) Identification No.)
Incorporation)
700 Dresher Road
Horsham, PA 19044
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (215) 328-6100
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
On November 16, 1999, VerticalNet, Inc. (the "Registrant") publicly
announced that it signed a definitive agreement to acquire NECX Exchange LLC.
A copy of the press release issued by the Registrant on November 16, 1999
concerning the acquisition is filed herewith as Exhibit 99.1 and is incorporated
herein by reference.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
VERTICALNET, INC.
(Registrant)
By /s/ Gene S. Godick
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Gene S. Godick
Chief Financial Officer
Dated: November 19, 1999
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EXHIBIT INDEX
Exhibit
Number Description
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99.1 November 16, 1999 press release: VerticalNet Agrees to Acquire
NECX Exchange, the World's Leading Electronics Exchange
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EXHIBIT 99.1
VerticalNet Agrees to Acquire NECX Exchange, the
World's Leading Electronics Exchange
- [email protected](2) Conference---
BERKELEY, Calif.--(BUSINESS WIRE)--Nov. 16, 1999-- Extends VerticalNet's
Commitment to the Multi-Billion Dollar Open Market Segment of the Electronics
Industry
VerticalNet, Inc. (Nasdaq: VERT - news), the Internet's leading portfolio of
business-to-business vertical trading communities, has signed a definitive
agreement to acquire NECX(R) Exchange LLC, the world's leading business-to-
business marketplace for the electronics industry. NECX is a privately held
leader in buying and selling semiconductors, electronic components, computer
products and networking equipment. The combination creates the Internet's first
large-scale trading community for engineers and purchasing professionals in the
electronics and high tech markets, with 18,000 trading partners globally and
access to an online inventory of more than three million products (SKUs).
VerticalNet(R) will integrate these new capabilities with existing vertical
communities in the Advanced Technology and Communications sectors, and create
new communities to leverage the broad product and service offerings of the
combined firms.
NECX's global market making, back office and logistics capabilities and presence
in Europe and Asia will support the international user base (international users
comprise 40% of VerticalNet's and 45% of NECX's user base).
VerticalNet President and CEO Mark Walsh said, "This is clearly a significant
strategic acquisition for VerticalNet. Adding NECX's market leadership and
domain expertise in electronics to the VerticalNet portfolio not only enriches
our transaction and market making abilities but also gives us a strategically
vital user base in Europe and Asia. As we build out this world-class real-time
trading platform, we see multiple applications where we can scale this to our
other markets.''
The NECX Exchange has developed deep expertise in servicing the open market
segment of the multi-hundred billion dollar electronics industry. In 1998, NECX
had gross revenues of approximately $350 million and gross profit of
approximately $37 million from market making and inventory management services
to leading manufacturers, Original Equipment Manufacturers (OEM), Contract
Equipment Manufacturers (CEM) and distributors.
Through this acquisition, VerticalNet is extending its commitment to bring more
transaction and market making capabilities to its communities by combining its
rich content and sourcing tools with NECX's neutral and anonymous market making,
strong back office, global fulfillment and logistics, quality assurance, as well
as credit and risk management capabilities.
"We are extremely excited to bring NECX into the VerticalNet family. We believe
that their strong, innovative management team with deep domain expertise and
relationships can quickly enhance the
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capabilities of our high growth electronics communities,'' continued Walsh.
"NECX has had many `firsts' including the deployment of its World Wide
Availability database in the mid-1980's, an open market trading floor and
customized sell/buy side solutions.''
"We have been working very hard to develop a true `one stop shop' that provides
the complete solution for spot and open market customers,'' said Larry Marshall,
President of NECX Exchange. "The VerticalNet combination accelerates our
strategy, and is a market winning move for both our firms. We expect this to
have a very positive effect on online purchasing in the electronics segment, and
look forward to forging key alliances with major members of the supply chain to
bring greater liquidity along with lower distribution and procurement costs to
members of the electronics trading community.''
"In addition to teaming up with the premier market maker in the electronics
industry, VerticalNet has acquired core competencies in the areas of trading and
logistics which will ultimately be leveraged across our other VerticalNet
communities,'' said Mike Hagan, Executive Vice President and co-founder of
VerticalNet.
"This development is a bold move that gives VerticalNet the potential to capture
the top spot in what is rapidly becoming the highest stakes game in the B2B
exchange market,'' comments Kevin Jones of Net Market Makers. "It defines a new
playing field where only firms with a true hybrid offering which integrates
personal service, powerful e-commerce interfaces with robust applications, rich
content, back office and logistics operations can succeed. One of the key
competitive factors in the B2B battle is the ability to transfer capabilities,
skills and learning across vertical communities. An exciting possibility here is
for VerticalNet to then transfer market making expertise, services and
infrastructure to some of its other vertical communities,'' he adds.
Terms of the deal include payment of $10 million in cash and the issuance of
stock with a current market value of approximately $95 million and the
assumption of debt and certain other liabilities. The transaction is expected to
close by year-end, subject to receipt of Hart-Scott-Rodino clearance and other
customary closing requirements.
There will be an analyst conference call at 9:30 a.m. ET. The call will be
Webcast at www.vcall.com and www.verticalnet.com.
About VerticalNet
VerticalNet, Inc. (www.verticalnet.com), owns and operates 53 industry-specific
Web sites designed as online business-to-business communities, known as vertical
trade communities. These vertical trade communities provide users with
comprehensive sources of information, interaction and e-commerce.
They are grouped into 10 sectors: ADVANCED TECHNOLOGIES: Aerospace Online, Auto
Central.com, ComputerOEM Online, Embedded Technology.com, Medical Design Online,
Plant Automation.com, Semiconductor Online, Test and Measurement.com;
COMMUNICATIONS: Digital Broadcasting.com, EC Online, Fiber Optics Online,
Photonics Online, Premises Networks.com, RF Globalnet, Wireless Design Online,
Wireless Networks; ENVIRONMENTAL: ElectricNet, Pollution
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Online, Power Online, PublicWorks Online, Pulp and Paper Online, Safety Online,
Solid Waste Online, Water Online; FOOD AND PACKAGING: Bakery Online, Beverage
Online, Dairy Network.com, Food Ingredients Online, Food Online, Meat and
Poultry Online, Packaging Network.com; FOODSERVICE/ HOSPITALITY: E-
hospitality.com, Foodservice Central.com; HEALTHCARE: E-Dental.com, Home Health
Provider.com, Hospital Network.com, Long Term Care Provider.com, Nurses.com;
MANUFACTURING AND METALS: Machine Tools Online, Metrology World.com, Surface
Finishing.com, Tooling Online; PROCESS: Adhesives and Sealants.com, Chemical
Online, Hydrocarbon Online, Paint and Coatings.com, Pharmaceutical Online, Oil
and Gas Online; SCIENCE: Bioresearch Online, Drug Discovery Online, Laboratory
Network.com; SERVICE: HR Hub.com, Property and Casualty.com.
About NECX Exchange
NECX Exchange (www.necx.com) has headquarters on three continents, with American
operations located in Peabody, Mass., U.S.A., Asia-Pacific operations in
Singapore, and European operations in Galway, Ireland, and Stockholm, Sweden. It
benefits buyers and sellers of electronic products by providing a centralized
marketplace. By aggregating supply and demand, providing comprehensive price and
availability information, and using a global logistics and quality assurance
infrastructure, it anonymously allows buyers and sellers to execute mutually
beneficial transactions.
This announcement contains forward-looking statements that involve risks and
uncertainties, including those relating to the Company's (i)the ability to
integrate a global exchange with the Company's vertical trade communities;
(ii)ability to enhance capabilities of electronic communities; (iii)expectation
that the NECX acquisition will positively impact online purchasing in the
electronics segment; (iv)expectation of greater liquidity and lower distribution
and procurement costs for electronic trading community members; (v)belief that
it can transfer market making expertise, service and infrastructure to its
existing communities; and (vi)information contained elsewhere in this document
where statements are preceded by, followed by or include the words "believes,''
"plans,'' "intends,'' "expects,'' "anticipates'' or similar expressions. For
such statements, the Company claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995. Actual results may differ materially from the results predicted,
and reported results should not be considered as an indication of future
performance. The potential risks and uncertainties that could cause actual
results to differ from those included in the forward-looking statements include,
among others, the Company's ability to complete the NECX acquisition, the
difficulty in assimilating the NECX operations and workforce, the Company's lack
of experience in global market making, the Company's limited operating history,
the increasingly competitive and constantly changing environment for advertising
sales and for VerticalNet, the early stage of the Web as an advertising and
commerce medium, and the Company's dependence on third parties for technology,
content and distribution. Additional factors that could cause actual results to
differ from those contained in the forward-looking statements include those set
forth in the Company's Annual Report on Form 10-K for the period ending December
31, 1998 and the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1999, both of which have been filed with the SEC.
All trademarks are the property of their respective owners.
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Contact:
For investor relations information, contact:
At the company:
Muriel Lange, Director of Investor Relations
VerticalNet
215-315-3367
[email protected]
or
Sandie Marrinucci, Corporate Communications
NECX
978-538-8052
[email protected]
or
For media inquiries, contact:
Peter Harris
Peppercom
212-931-6112
[email protected]
or
Mark McClennan or Lisa Beyer
Schwartz Communications, Inc.
781-684-0770
[email protected]
