CONTACTS:
Gus Carlson Marie Toulantis
Vice President Chief Financial Officer
Corporate Communications Barnes & Noble.com
Barnes & Noble.com 212-414-6007
212-414-6014 [email protected]
[email protected]
BARNES & NOBLE.COM TO ACQUIRE FATBRAIN.COM
NEW YORK, N.Y., September 13, 2000 - Barnes & Noble.com (Nasdaq: BNBN)
(www.bn.com) announced today that it will acquire Fatbrain.com, Inc. (Nasdaq:
FATB) (www.fatbrain.com), the third largest online bookseller specializing in
professional and technical titles for the corporate marketplace.
Under the terms of the deal, Barnes & Noble.com will acquire Fatbrain.com in
a merger, in exchange for $4.25 per share for all the outstanding shares of
Fatbrain.com. After the merger, Fatbrain.com will become a wholly owned
subsidiary of Barnes & Noble.com llc. The consideration is comprised of 75
percent stock in Barnes & Noble.com and 25 percent cash for each Fatbrain.com
share. The deal is valued at approximately $64 million. The transaction is
subject to regulatory and stockholder approvals, including Hart Scott Rodino
clearance.
Fatbrain.com's senior management, including its president and chief executive
officer, Dennis Capovilla, and executive vice president of Product
Development, Kim Orumchian, would continue in their current positions, and
the company would remain headquartered in Santa Clara, Calif.
Fatbrain.com's Web-based services reach more than 3.5 million employee
desktops at almost 350 Fortune 1000 companies worldwide. The company's
Information Exchange offering is a comprehensive Web-based method to
catalogue, present and distribute corporate materials, ranging from third-
party published works such as books and training materials to a company's own
publishable content. There are more than 500 individual Fatbrain.com co-
branded online bookstores and information resource centers, most of which are
accessed via the sponsoring organization's corporate intranet.
"We believe Fatbrain.com's business-to-business focus, combined with its
digital publishing and print-on-demand capabilities, complement Barnes &
Noble.com's consumer-based initiatives in these areas," said Steve Riggio,
vice chairman of Barnes & Noble.com. "We also believe that the companies
have complementary cultures that will foster our ability to build both the
consumer and business-to-business markets together. Most important, we are
impressed with the Fatbrain.com management team, whose talent and experience
has distinguished them as leaders in the corporate bookselling marketplace."
"We are extremely excited about our proposed merger with Barnes & Noble.com,"
said Mr. Capovilla of Fatbrain.com. "While the synergies derived from our
book businesses are an obvious fit and will naturally benefit from increased
scale, we believe the incremental resources provided by the Barnes &
Noble.com backing and brand will greatly enhance and accelerate the rollout
of Information Exchange to corporations seeking to streamline the management
and distribution of their publishable materials."
With the acquisition, Barnes & Noble.com would own approximately 50 percent
of MightyWords, formerly a subsidiary of Fatbrain.com and a leading provider
of digital content. In June Barnes & Noble.com invested approximately $20
million for a 30 percent equity stake in MightyWords. Fatbrain.com retained
an equity stake of approximately 23 percent in MightyWords.
Barnes & Noble.com's management will host a conference call for investment
analysts at 5:15 P.M. EST on Wednesday, September 13, 2000. This call will
be simulcast on the Web at www.streetfusion.com and will be archived for 10
days.
About Fatbrain.com
Fatbrain.com(TM) helps organizations capitalize on business information and
professionally published materials by streamlining its management and
distribution, enabling delivery in digital and/or hardcopy format directly
into the hands of employees, partners and customers. Fatbrain.com's easy-to-
use, comprehensive Information Exchange service offering allows organizations
to easily publish and offer access to professional and business materials
when, where and how the recipient wants it via an online information resource
center. Today, the company's Web-based information management services reach
more than 3.5 million desktops at almost 350 of the Fortune 1000 corporations
worldwide. Visit Fatbrain.com on the Web at http://www.fatbrain.com.
About Barnes & Noble.com
Barnes & Noble.com is the first online bookseller to offer a vast in-stock
inventory with an editorially rich bookselling environment. The company's
online catalogue includes more than three million titles, including virtually
every book in print as well as more than 12 million listings from its
nationwide network of out of print, rare and used book dealers. Its
lightning fast proprietary search engine enables customers to locate specific
titles quickly or to explore books on just about any imaginable topic. With
more than 800,000 titles on its shelves it now offers the largest selection
of in-stock titles of any bookseller online. Encompassing over 30 miles of
shelving, it is the largest collection of books under one roof in the history
of bookselling. More than 50,000 book publishers, including thousands of
small and independent presses, university publishers and privately published
books are represented.
Barnes & Noble.com brings the world's best-known bookselling name to the Web
with an editorially rich site that includes more than 500,000 synopses, book
reviews, customer reviews, table of contents, articles and interviews. It
hosts daily live author chats, bringing readers and writers together in
lively interactive discussions. Customers of Barnes & Noble stores can find
a nationwide store directory, complete with driving instructions and listings
of local events. Rated No. 1 by Forbes.com as the best bookselling site on
the Web two years running, the company strives to become the single best
place to buy books online.
Barnes & Noble.com's excellence in e-commerce extends to the music business,
where it was voted by Forbes.com as the No. 1 music site on the Web. Cited
by Forbes.com for being "best-of-class for anyone who wants to learn about
the music they're buying" it features a classical music superstore and is
distinguished by an emphasis on jazz, world music and Broadway show tunes.
As in its book site, Barnes & Noble.com's music site has extensive editorial
features from both in-house editors and licensed content.
Barnes & Noble.com is an industry leader in the burgeoning market for
electronic books. The site features more than 4,000 eBook titles that can be
viewed in a variety of formats. The company dramatically expanded its
offering of eBooks with the opening of its eBookStore in August 2000,
featuring the new Microsoft Reader platform, which will enable users to
download eBooks to any PC, laptop or Pocket PC and open the market for eBooks
to more than 100 million users. The company believes that in the not too
distant future it will offer digital versions of virtually every book in
print.
In May 2000 Barnes & Noble.com pioneered Same-Day Delivery service to its
Manhattan, New York customers. This rapid delivery service enables the huge
residential and working population of Manhattan to get delivery within hours
of virtually any book in print from today's bestsellers to the most hard-to-
find titles from small publishers. The service also includes delivery of
more than 100,000 music CDs.
Barnes & Noble.com's e-commerce initiative extends to the B2B arena, where
its Business Solutions program provides Fortune 1000 companies with a turn-
key Intranet bookstore, enabling them to streamline and control their book
purchasing process. Barnes & Noble.com is also a leader in mobile commerce
through its Barnes & Noble On the Go wireless shopping. Customers can now
shop the company's Web site from portable devices such as PDAs and mobile
phones, giving them access to any book, anywhere, any time.
Barnes & Noble.com has made strategic investments in companies whose products
and services enable it to increase its offerings in information products and
services that are compatible with its core business. By doing so the company
is able to expand its scope by benefiting from the investments, marketing and
technology initiatives of industry leaders. To date, the company has
invested in enews.com, the Internet's No. 1 site for discount magazine
subscriptions; BuyEnlarge, which uses state-of-the-art technology to produce
prints and posters on demand; notHarvard.com, the pioneer in developing
online branded universities and the concept of eduCommerce, and MightyWords,
a leading provider of digital content.
SAFE HARBOR
This release may contain forward-looking statements regarding expectations of
the company. These statements are based on the beliefs of the management of
the company as well as assumptions made by and information currently
available to the management of the company. Such statements reflect the
current views of the company with respect to future events, the outcome of
which is subject to certain risks, including among others general economic
and market conditions, changes in product demand, the growth rate of Internet
usage and e-commerce, possible disruptions in the company's computer or
telephone systems, possible increases in shipping rates or interruptions in
shipping service, effects of competition, the level and volatility of
interest rates, changes in tax and other governmental rules and regulations
applicable to the company and other factors, risks and uncertainties more
specifically set forth in the company's public filings with the Securities
and Exchange Commission. The forward-looking statements herein speak only as
of the date of this release. The company expressly disclaims any obligation
or undertaking to release publicly any updates or revisions to any forward-
looking statement included in this release to reflect any changes in the
company's expectations or any changes in events, conditions, or circumstances
on which any such statement is based. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results or outcomes may vary materially from those described herein.
Fatbrain.com is a trademark of Fatbrain.com, Inc. All company and product
names may be trademarks of the respective companies with which they are
associated.
