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Filed by Onvia.com, Inc. pursuant to
Rule 425 under the Securities Act of
1933 and deemed filed pursuant
to Rule 14a-12 of the Securities
Exchange Act of 1934
Subject Company: Onvia.com, Inc.
Commission File No.: 000-29609
Subject Company: DemandStar.com, Inc.
Commission File No.: 000-28703
Onvia.com, Inc. and DemandStar.com, Inc. distributed the
following press release on November 20, 2000:
November 20, 2000
For IMMEDIATE RELEASE
Contact:
Onvia.com Don Bowler
Gretchen Sorensen VP Investor Relations
VP Corporate Affairs 206-373-9506
206-373-9082
DemandStar.com
Sam Chesser
Public Relations
954-577-3924
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Onvia Strengthens Business-to-Government
Exchange Through Acquisition of DemandStar
Company to Merge with Preeminent B2G E-commerce Solution Provider
SEATTLE, WA, and PLANTATION, FLA -- (November 20, 2000)--Onvia.com, Inc.
(Nasdaq: ONVI), the leading business-to-business exchange for small business
buyers and sellers, has reached a definitive agreement to acquire
DemandStar.com, Inc. (OTCBB: DMND) a leading provider of business-to-government
(B2G) e-commerce solutions, for 6 million shares of Onvia common stock. Based on
the Friday, November 17, 2000 closing price of $2.06 per share, the
consideration for the transaction is approximately $12.4 million.
"This acquisition enables Onvia to provide additional revenue opportunities for
small businesses," said Glenn Ballman, Onvia's chairman and chief executive
officer. "With DemandStar onboard, we can increase our ability to help
government agencies streamline their procurement operations and provide the
small businesses in the Onvia exchange with greatly expanded government
contracting opportunities."
Under the agreement, each share of DemandStar common stock will be converted
into the right to receive approximately 0.6 shares of a share of Onvia common
stock.
The transaction has been unanimously approved by both companies' Boards of
Directors and is subject to approval by DemandStar shareholders. The merger is
expected to close in the first quarter of 2001, subject to customary conditions,
including obtaining necessary regulatory approvals. In addition, Onvia has
agreed to provide DemandStar in aggregate $5 million in bridge financing in the
form of convertible promissory notes.
H.T.E., Inc. (Nasdaq: HTEI) (which owns approximately 16.4% of DemandStar's
outstanding common stock and 100% of DemandStar's outstanding preferred stock)
and the members of the DemandStar Board of Directors and executive management
have agreed to vote their shares in favor of the merger. These shares
collectively represent approximately 42% of the aggregate voting power of
DemandStar's shareholders entitled to vote on the merger.
"This proposed merger further strengthens DemandStar and provides many benefits
to our shareholders, dedicated employees, government agency members, and their
vendors," said Bernard B. Markey, DemandStar's chairman. "DemandStar fits very
well with Onvia's culture, resources, and commitment to the B2G space", he
stated. As part of the proposed merger, DemandStar will become a wholly owned
subsidiary of Onvia and will remain totally focused on its current government
operations. The net result will be a stronger DemandStar with greater resources.
"This will enable our dedicated employees to further enhance the services we
currently deliver to our government agency and vendor members", stated Markey.
"In addition,
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merging with Onvia will dramatically increase our ability to penetrate the B2G
market nationwide, creating additional opportunities for our agency and vendor
members."
DemandStar has the largest business-to-government sales force focused on state
and local contracting opportunities and is already helping small businesses
transact with 200 government agencies in 26 states. DemandStar's clients include
the cities of San Antonio, TX, Norfolk, VA and San Jose; Ohio's Hamilton County;
and the Broward County School District, the fifth largest school district in the
nation. DemandStar also has an agreement with The Innovation Groups, Inc. an
organization of more than 450 members, including leading cities and counties
throughout the United States such as Minneapolis, MN; San Diego, CA; Tampa, FL;
Houston, TX; Las Vegas, NV and many others.
"DemandStar has earned the trust of government buyers and small business sellers
by bringing them together for their mutual success," Ballman added. Ballman
noted that DemandStar has helped government agencies purchase goods and services
more efficiently, drastically reduce advertising and printing costs,
significantly increase the number of website visits, and ultimately obtain the
best value for taxpayer's dollar.
This is Onvia's second acquisition of an online business-to-government exchange
and further establishes Onvia as a leading channel in this market segment. In
July, Onvia purchased Globe-1, which manages government buyers in more than 25
marketplaces, with annual buying power of more than $29 billion. The DemandStar
acquisition will provide Onvia an additional $4 billion in buying power from
government agencies and a fee-based revenue stream through subscription and
transaction fees from the participating small business suppliers, which now
includes over 13,000 subscribers nationwide.
The companies expect to complete the transaction, which is structured as a tax-
free merger and will be accounted for as a purchase, by March 1, 2001. The
Boards of Directors of both companies have unanimously approved the merger,
which awaits approval by DemandStar's shareholders.
About Onvia.com
Onvia.com, headquartered in Seattle, is the leading business-to-business
exchange for small business buyers and sellers. Onvia helps small businesses
succeed by aggregating demand and providing an exchange where small businesses
can buy and sell services and products; gather valuable news, product and
service information; and access free business forms, worksheets, and
productivity tools. For more information, contact Onvia.com: 1260 Mercer Street,
Seattle, WA 98109. Phone: 206-282-5170. Web: www.onvia.com.
About DemandStar.com
DemandStar operates the leading online exchange that unites local government
purchasers with suppliers of goods and services. DemandStar's marketplace
enables governments to purchase more efficiently and makes it
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easier for suppliers to do business with the government. Suppliers can become
part of this purchasing stream by registering at www.DemandStar.com or by
calling (800) 711-1712. For more information, contact DemandStar.com 1200 S Pine
Island Rd, 6th Floor, Plantation, FL 33324. Phone (954) 577-6500.
Onvia to WEBCAST Acquisition Announcement
Onvia will broadcast its conference call in conjunction with the announcement of
this acquisition live over the Internet at 1:00 p.m. PST, 4:00 p.m. EST, today,
November 20, 2000. Glenn Ballman, chairman and chief executive officer, Mike
Pickett, president and chief operating officer, and Mark Calvert, chief
financial officer and the DemandStar management team will lead the call.
Please visit the "Investor Relations" section at www.corporate.onvia.com and
click on the microphone icon to register, test connections and obtain any
necessary software. Participants may submit questions prior to the broadcast by
e-mailing [email protected].
For those unable to participate during the live Webcast, the call will be
archived on the Web site for future reference.
This release contains, in addition to historical information, forward-
looking statements within the meaning of the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. These statements are based on
management's current expectations or beliefs, and involve risks and
uncertainties that could cause actual results to differ materially from those
described in the forward-looking statements. The forward-looking statements in
this release address the future financial results of Onvia and DemandStar, new
markets and product and service offerings, and timing and benefits of the
acquisition.
The following factors, among others, could cause actual results to differ
materially from those described in the forward-looking statements: inability to
obtain or meet conditions imposed for the DemandStar acquisition, such as the
failure to obtain required stockholder or regulatory approvals for the merger;
failure of the combined company to retain and hire key executives, technical
personnel and other employees and difficulty of managing a larger organization;
the risk that DemandStar and Onvia businesses will not be integrated
successfully; costs related to the merger; fluctuating market prices that could
cause difficulties in Onvia's acquisition strategies; the difficulty the market
may have in valuing Onvia's or DemandStar's business model; Onvia's failure to
realize the anticipated benefits of the merger; Onvia's failure to manage its
expansion; and Onvia's failure to further identify, develop, and achieve
commercial success for new products and services.
For a detailed discussion of these and other cautionary statements, please
refer to the Company's filings with the Securities and Exchange Commission at
http://www.sec.gov. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this release.
Onvia undertakes no obligation to update publicly any forward-looking statements
to reflect new information, events or circumstances after the date of this
release or to reflect the occurrence of unanticipated events.
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Investors and security holders are urged to read the proxy statement/prospectus
regarding the proposed merger when it becomes available because it will contain
important information about the transactions contemplated by the merger
agreement.
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The proxy statement/prospectus will be filed with the Securities and Exchange
Commission by both companies. Investors and security holders may obtain a free
copy of the proxy statement/prospectus (when it becomes available) and other
documents filed with the Commission by the companies at the Commission's web
site at http://www.sec.gov. The proxy statement/prospectus and these other
documents may also be obtained for free from the companies.
DemandStar and its executive officers and directors may be deemed to be
participants in the solicitation of proxies from shareholders of DemandStar with
respect to the transactions contemplated by the merger agreement. Information
regarding such officers and directors is included in DemandStar's S-1 filed with
the Commission on December 22, 1999 and other documents filed with the
Commission. These documents are available free of charge at the Securities and
Exchange Commission's web site at http://www.sec.gov and from DemandStar.
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