Streamline.com to Acquire Chicago-based Scotty's Home Market
Company Expands into Third Metropolitan Market
WESTWOOD, Ma.--(BUSINESS WIRE)--Oct. 19, 1999-- Streamline.com, Inc. (NASDAQ: SLNE - news) today announced the signing of a definitive agreement to acquire Beacon Home Direct, Inc., d/b/a Scotty's Home Market, a Chicago-based Internet retailer of grocery store products and pioneer in the consumer direct industry.
Upon completion of the acquisition, Streamline.com will serve customers in the Boston, Washington D.C., and Chicago markets, three of the largest seven U.S. metropolitan areas.
The proposed acquisition of Scotty's calls for the exchange of Streamline.com stock for Scotty's stock, which is expected to result in the issuance of 4.3 million shares of Streamline.com stock. Following the acquisition, which was approved by the board of directors of both companies, Scotty's will change its name to Streamline.com. The acquisition is expected to be completed by the first quarter of next year and is subject to approval by the stockholders of each company, regulatory approval and other typical conditions.
``Scotty's has been one of the early pioneers in this emerging industry and is an ideal strategic fit with Streamline.com,' said Timothy A. DeMello, the founder and Chief Executive Officer of Streamline.com. ``This acquisition should enable us to accelerate our efforts in what we believe will be one of the most important aspects of e-commerce: `controlling the last mile to the customer's home.' In addition, the combination of our own internal growth, coupled with the acquisition, should allow us to generate a revenue growth rate of more than 250% next year.'
``We believe the consumer direct industry is poised for explosive growth and will be dominated by five or six major players,' said Don Sokolnicki, Vice President of Consumer Direct of Nestle USA. ``Nestle has been working with companies like Streamline.com, Peapod, HomeGrocer, Scotty's, ShopLink, and recently Webvan to expand our knowledge of this channel. We believe these companies will be the dominant players in the consumer direct industry. Streamline.com's acquisition of Scotty's will clearly make them an exceptionally strong force and one of the leaders who will share in this large market opportunity.'
``With more than 4.2 million suburban residents, Chicago is one of the largest U.S. markets for our service. Scotty's is a strong player in that market, with a low cost warehouse-based fulfillment model and expected 1999 revenues of $7.5 million,' DeMello said. ``The company provides an on-demand, unattended service that will allow Streamline.com the opportunity to test the broadening of its offering, as well as continue the development of Scotty's innovative Scottyscan(TM), a hand-held Palm Pilot device with built-in bar code scanning, which makes online shopping faster and more convenient for customers.'
Scott DeGraeve, founder of Scotty's, will lead Streamline.com's efforts in Chicago as the Vice President and General Manager of the Chicago market. Chris Sang, currently the Chief Operating Officer for Scotty's, will join the Streamline.com Board of Directors. Mr. Sang has led the development of a new 93,000 square foot, state-of-the-art fulfillment center in the Chicago market that is expected to open in January, and will continue to provide his logistics expertise as a Streamline.com Board member.
``To be a leader, we must have an efficient, national network of local delivery systems centered around customer service and propelled by technology that makes our customers' lives easier,' DeGraeve said. ``In Streamline.com, we have a partner who shares our vision for the future and has the ability to be a major player in this space. Our Chicago customers will soon enjoy a more extensive selection of products and services delivered to their home. We are excited to have the opportunity to work together with Streamline.com to build a national presence.'
The combination of Streamline.com and Scotty's is also expected to improve the targeted market research and advertising services that the company provides to consumer packaged goods companies through its Consumer Learning Center. The Consumer Learning Center is a research center that examines and measures consumer buying trends and behavior in the emerging consumer direct industry for 13 consumer packaged goods companies including Nestle USA, the Gillette Company, the Procter & Gamble Company, Kraft Foods, and Warner-Lambert Company.
Last week, Streamline.com announced its opening in the Washington D.C. market and the initiation of a co-marketing program for customer acquisition with Nordstrom, the company's lead investor. ``After years of business development and customer research, Streamline.com is now ready for a rapid national roll out. We look forward to offering the Streamline.com service to our customers across the country. Streamline.com's focus on a high-quality customer service relationship should prove to be a major point of differentiation,' said Dan Nordstrom, co-president of Nordstrom, Inc. and Streamline.com Board member.
Following Washington, Chicago is now the third market in Streamline.com's accelerated national expansion plan to serve customers in the top 20 U.S. metropolitan markets by year-end 2004. The company plans to announce its fourth market within the next few weeks.
About Scotty's Home Market
Scotty's Home Market (www.scottysmkt.com), a part of Beacon Home Direct, Inc., is an e-commerce/logistics company that provides solutions direct to the home for grocery items, prepared foods and household products, along with information and solutions for meal planning and home provisions.
About Streamline.com
Founded in 1993, Streamline.com is a pioneer in the consumer direct market place operating in the Boston and Washington D.C. markets. The company provides busy suburban families with time-saving lifestyle solutions through Internet-based ordering of groceries and a wide range of other quality goods and services. The company delivers these items directly to customers' homes using a full-size refrigerator/freezer shelving unit and a keypad garage entry system. The company also provides targeted research and marketing services to many consumer goods companies nationwide. Streamline.com can be found on the World Wide Web at www.streamline.com.
Note: This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are inherently uncertain. Actual performance and results may differ materially from those projected or suggested due to certain risks and uncertainties, including, without limitation, those associated with our limited operating history and history of losses, inexperience in implementing our expansion strategy, need to raise additional capital, reliance on the growth of e-commerce and the infrastructure of the Internet, increased competition, and dependence on customer acceptance of direct, unattended delivery of goods and services. Additional information concerning these and certain other risks and uncertainties that could cause actual results to differ materially from those projected or suggested, is contained in the Company's public filings with the Securities and Exchange Commission (SEC), copies of which are available from the SEC's website at sec.gov or from the Company upon request. The forward-looking statements contained herein represent the Company's judgment as of the date of this release, and the Company cautions readers not to place undue reliance on such state |
