FreeMarkets Signs Agreement to Acquire Covisint Auction Services
PITTSBURGH--Dec. 3, 20031, 2003--| Purchase positions company as premier provider of sourcing technologies and services to the automotive industry |
FreeMarkets, Inc. , the leading provider of global supply management (GSM) solutions, today announced that it has signed an agreement to acquire the sourcing and services assets of Covisint, the independent e-business service provider for the global automotive industry. The purchase will position FreeMarkets as the premier provider of sourcing technologies and services to the automotive industry. The agreement, which is subject to customary closing conditions, is expected to be completed in early January.
Under the terms of the agreement, Covisint will transfer its customer contracts for auction services to FreeMarkets. These contracts will provide committed revenue to FreeMarkets over the next three years.
As a result of the acquisition, FreeMarkets will serve automakers DaimlerChrysler, General Motors, and Ford under long-term agreements, using its own sourcing technology and services. FreeMarkets may also provide its solutions to OEMs such as Mitsubishi, Nissan, Renault, PSA Peugeot, Fiat, and other Covisint auction services customers. Also as part of the deal, FreeMarkets will hire select Covisint auction services employees.
"FreeMarkets has built a strong presence in the automotive industry over the years," said FreeMarkets' President and CEO Dave McCormick. "Our acquisition of Covisint auction services will further strengthen and expand this position, and enable us to continue providing companies across the entire automotive supply chain with technology and services to address successfully the sourcing challenges they face."
To date, FreeMarkets has helped companies in the automotive industry source over $20 billion in goods and services and identify savings of more than $3.5 billion.
"Covisint has had a very successful year in which we more than doubled our user base," said Bob Paul, CEO, Covisint. "The sale of our auction services to FreeMarkets is a logical and evolutionary step as we continue to focus our strategy on the Automotive Industry Operating System and delivering supplier management portals and data messaging services."
"We began building our auction service business when the technology was in its infancy and it is now time to turn it over to someone that has sourcing technology and expertise as a core competency," Paul continued. "We believe FreeMarkets is the world's premier supply management company with proven technology and a solid reputation for delivering results."
About FreeMarkets
FreeMarkets is the leader in providing companies with software, services, and information for Global Supply Management (GSM). FreeMarkets' GSM solutions help companies to lower costs, reduce risks, and increase profitability by improving their supply management processes and expanding the reach and capabilities of their supply management organizations. FreeMarkets can be found on the Web at www.freemarkets.com.
About Covisint
Covisint is the independent e-business service provider for the global automotive industry. Its business-to-business services connect and enable car manufacturers and their suppliers to reduce costs, increase efficiency, enhance quality and improve time to market. Covisint was founded by DaimlerChrysler, Ford, General Motors, Renault, and Nissan in 2000. Since its inception, PSA Peugeot Citroen also has joined the initiative. Covisint has its headquarters in Southfield, Mich., and sales offices in Amsterdam, Frankfurt, Tokyo, Paris, Brazil and Mexico. For more information about Covisint, visit www.covisint.com.
Forward-looking statements
Statements in this press release that are not historical facts, including those statements that refer to FreeMarkets' plans, prospects, expectations, financial projections, strategies, intentions, and beliefs, are forward-looking statements. These forward-looking statements are based on information available to FreeMarkets today, and FreeMarkets assumes no obligation to update these statements as circumstances change. There are risks and uncertainties that could cause actual results to differ materially from the forward-looking statements, including, without limitation, market acceptance of FreeMarkets' products and services, the competitive nature of the market for GSM products and services, FreeMarkets' ability to predict its revenues and earnings, FreeMarkets' ability to develop competitive new products and services on a timely basis, introduction of new products and services by competitors, declining or uncertain economic and industry conditions, FreeMarkets' ability to attract and retain personnel and other risk factors that are described in more detail in FreeMarkets' most recent Annual Report on Form 10-K, and its other filings with the Securities and Exchange Commission.