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EXHIBIT 99.1
ARIBA TO ACQUIRE SUPPLIERMARKET.COM
ONLINE COLLABORATIVE SOURCING TECHNOLOGY TO EXTEND ARIBA PLATFORM
REACH AND VALUE; STREAMLINE SOURCING PROCESS FOR BUYERS, SELLERS,
MARKETPLACES; ADD NEW NETWORK REVENUE SOURCES
MOUNTAIN VIEW, CALIF. - JUNE 26, 2000- Ariba, Inc. (Nasdaq: ARBA) today
announced that it has signed a definitive agreement to acquire privately-held
SupplierMarket.com, a leading provider of online collaborative sourcing
technologies that allow buyers and suppliers of direct and indirect materials to
locate new trading partners, negotiate purchases and collaborate on the
Internet.
Ariba will issue approximately 6.3 million shares of stock, representing less
than three percent of Ariba fully diluted shares outstanding. The agreement is
structured as a stock-for-stock merger and will be accounted for as a purchase
transaction. The transaction is expected to close by the third calendar quarter
of 2000.
Burlington, Massachusetts-based SupplierMarket.com is a leader in Internet-based
collaborative sourcing technology with deep direct materials sourcing expertise,
both in the sourcing process itself and in specific commodity areas. The
company, which employs approximately 155 people, already has over 7,700
registered buyers and more than 12,000 registered suppliers.
The acquisition will further extend the value and reach of the
Ariba-Registered Trademark- B2B Commerce Platform to create new competitive
advantage, savings and revenue opportunities for buyers, suppliers, and
marketplaces through streamlined global sourcing. Internet-based collaborative
sourcing will also provide Ariba with new network-based revenue streams,
deeper penetration into vertical and direct materials markets, and accelerated
network effect for all on the Ariba platform.
"Sourcing represents the single largest opportunity for organizations to realize
savings in procurement costs and to impact supply chain operations," said Tim
Minahan, research director of Aberdeen Group's e-Business practice. "Aberdeen
research indicates that as much as 80 percent of the savings potential on the
total cost of a product occurs during the initial sourcing cycle. With
SupplierMarket.com, Ariba gains a robust collaborative sourcing platform and
related domain expertise that have been proven to effectively automate and
enhance processes for identifying and negotiating the optimal supply chain for
both direct and indirect materials. SupplierMarket.com will significantly
complement the Ariba platform and should appeal equally to buyers, suppliers and
marketmakers alike."
"We believe sourcing is the next strategic high ground for B2B-- it is
fundamental to our customers and partners as we work together to build liquidity
in the B2B economy," said Keith Krach, chairman and CEO, Ariba. "This
acquisition not only deepens the reach of the Ariba B2B Commerce Platform to new
customers in new markets, but it also extends our value proposition to and
business opportunities with our existing base of marketplaces, corporate
exchanges, buyers, suppliers, commerce service providers and partners of all
sizes. And we gain the
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additional leadership and entrepreneurial zeal of some of the industry's
foremost experts in sourcing."
"Our proven technology is an ideal, complementary fit to extend the Ariba
platform and leverage its global reach into many of the world's largest buyers
and marketplaces," said Asif Satchu, chairman and president, SupplierMarket.com.
"Ariba and SupplierMarket also share the same views on the importance of
innovation, quality technology and customer-driven results. We are very excited
by the enormous opportunities created by the combination of our two companies."
EXTENDS VALUE AND REACH OF ARIBA PLATFORM
Before buyers and suppliers can transact online they must find each other,
collaborate on requirements, and agree to terms. Today, this human-intensive
sourcing process is slow, inefficient and highly fragmented with limited
visibility between buyers' needs and suppliers' capabilities.
By offering integrated, multi-attribute, collaborative sourcing integrated with
its open, global eCommerce platform, Ariba will enable companies and
marketplaces worldwide to increase competitive advantage by more dynamically
creating and participating in automated supply chains, quickly re-configuring
them to meet changing market and competitive opportunities and challenges.
Web-based collaborative sourcing has already demonstrated the ability save
buyers money--SupplierMarket.com customers report an average 13 percent savings.
Integrated collaborative sourcing will also offer suppliers faster access to and
integration with Ariba's global network of online buyers, lower their cost of
sales, and allow differentiation on attributes beyond price.
This acquisition extends the reach of Ariba platform across the most valued
links in the B2B value chain, adding new network-based revenue streams for Ariba
and its customers and accelerating the network effect across the global Ariba
platform. With its proven capabilities and domain expertise in raw materials and
engineered products, SupplierMarket.com also deepens the Ariba platform's reach
into the more than $5 trillion global direct materials market, complementing the
Ariba platform's marketplace, dynamic trade, collaboration and logistics
solutions, as well as the capabilities of its key partners.
Through the open Ariba Commerce Services Network, Ariba will deliver Web-hosted
sourcing infrastructure to buyers and marketplaces of all sizes, including those
using non-Ariba solutions. This will allow marketplaces and buyers to quickly
offer their own branded sourcing services to their supply chain participants for
greater competitive advantage and faster time-to-liquidity.
"B2B marketplaces can offer collaborative sourcing to their participants to
speed time to liquidity, build lasting value and stickiness, and create scalable
revenue streams," said John Mumford, acting CEO of e2open.com, a global
business-to-business e-marketplace for the computer, electronics, and
telecommunications industries. "SupplierMarket.com technology, integrated with
the Ariba platform and offered through a marketplace's own brand, is a highly
attractive proposition to marketmakers."
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ADDS NEW SOURCES OF NETWORK REVENUE
Collaborative sourcing capabilities will create new network-based revenue
streams that will scale with the size and value of B2B transactions.
SupplierMarket.com's proven technology and value-based business model will be
highly scalable as it is extended to a large and growing network of buyers,
marketplaces and suppliers using the Ariba platform and its open Web-based
services.
ACCELERATES NETWORK EFFECT
The acquisition will further accelerate the network effect on the Ariba B2B
Commerce Platform, combining the 12,000 registered SupplierMarket.com suppliers
with the Ariba platform's existing 20,000, while providing a scalable
infrastructure for all suppliers around the world to self-register via the Web
with a standard browser. As buyers and marketplaces of all sizes offer their own
sourcing services powered by Ariba and SupplierMarket.com infrastructure, they
will attract additional suppliers that can be accessed by all interconnected
participants on the Ariba platform. As these buyers and suppliers attract one
another to the Ariba platform, it will further accelerate network effect and
liquidity.
ABOUT ARIBA, INC.
Ariba, Inc. is the leading business-to-business (B2B) eCommerce platform
provider. Through the Ariba B2B Commerce Platform -- an open, end-to-end
infrastructure of interoperable software solutions and hosted Web-based commerce
services -- the company enables efficient online trade, integration and
collaboration between B2B marketplaces, buyers, suppliers and commerce service
providers. The global reach and best-of-breed functionality of the Ariba B2B
Commerce Platform creates Internet-driven economies of scale and process
efficiencies for leading companies around the world. Ariba can be contacted in
the U.S. at +1.650.930.6200 or at www.ariba.com.
Ariba is a registered trademark of Ariba, Inc. All other products or company
names mentioned are used for identification purposes only, and may be trademarks
of their respective owners.
Information in this release may involve expectations, beliefs, plans, intentions
or strategies regarding the future. These forward-looking statements involve
risks and uncertainties. All forward-looking statements included in this release
are based upon information available to Ariba as of the date of the release, and
we assume no obligation to update any such forward-looking statement. The
statements in this release are not guarantees of future performance and actual
results could differ materially from our current expectations. Numerous factors
could cause or contribute to such differences including the risks associated
with integrating acquired businesses, products and technologies. Some additional
factors and risks associated with our business are discussed in the Company's
registration statement on Form S-1 declared effective by the Securities and
Exchange Commission ("SEC") on June 22, 1999, and in the other reports filed
from time to time with the SEC. Completion of the merger is subject to customary
closing conditions.
