American Power Conversion to Acquire energyOn.com to Address Web-Based Utility Deregulation Opportunities
Acquisition Broadens APC's Power-Related Service Offering
WEST KINGSTON, R.I., Feb. 7 /PRNewswire/ -- American Power Conversion (Nasdaq: APCC) and privately-held energyOn.com announced today that they have signed a letter of intent for APC to purchase energyOn.com in a cash transaction that is expected to close during the first half of 2000. energyOn.com was one of the first independent information and access resources for residential and commercial consumers in U.S. deregulated energy markets. energyOn.com's service enables consumers to shop the best available rate and service offered by area electricity and natural gas providers.
The acquisition of energyOn.com further broadens APC's power-related service offering to include the energy provider selection process. APC currently offers a variety of services that help to increase the overall availability of computing environments. These services include an analysis of a building's electrical infrastructure, assistance in selecting the ideal APC power protection solution to minimize the effects of unexpected power disruptions, as well as day-to-day responsive and preventive maintenance.
"This transaction is a marriage of APC's established brand, marketing scale, and installed base of more than 12 million customers worldwide with energyOn.com's utility deregulation expertise and experience," said Aaron Davis, vice president of APC's Small Systems Group. "The acquisition of energyOn.com enables APC to immediately leverage the initial electric and natural gas provider selection process in newly restructured markets as well as ongoing energy provider switching opportunities."
As of January 1, 2000, 16 states were deregulated in electricity, natural gas, or both industries. Based on consumer data from the Energy Information Administration, those states make up approximately 34 million or 40 percent of U.S. residential and commercial electricity and natural gas consumers who currently can choose their energy provider. With industry experts forecasting that all 50 states will enact utility "restructuring" legislation by 2005, the remaining consumers will be able to choose an energy supplier within 5 years. At the same time, International Data Corporation (IDC) estimates that the number of U.S. individuals within households and businesses who are actually buying goods and services over the Web will grow from 29.9 million per year in 1999 to 72.1 million by 2003. Globally, those numbers grow from 48 million per year in 1999 to 182.6 million in 2003.(1)
"The promise of more choice in the utility space is being rolled out not only within the U.S. but also throughout the world as more and more countries deregulate their utility markets," said David Freyder, energyOn.com's chief operating officer. "Long-term success in the energy purchasing solution provider space requires brand recognition, top-notch service, competitive pricing, and access to a broad mix of customers at the lowest possible acquisition cost. An APC-energyOn.com combination is the recipe for that success."
energyOn.com generates revenue through transactional "finders fees" paid by contracted utilities in exchange for new customers energyOn.com acquires. Additional revenue opportunities include Web traffic-driven advertising revenue and sales of energy-related products and services.
"We believe this partnership with APC is a significant step towards enhancing energyOn.com's 'matchmaker' role in the deregulated energy environment," continued Freyder. "By leveraging APC's nearly one million monthly Web site visitors and the expected explosion of customers who will be seeking information about energy suppliers worldwide, this union will provide customers with a 'one-stop-shop' for power-related products and services."
In the opinion of management, the acquisition will not have a material effect on APC's consolidated financial position or results of operations and liquidity. Closing of the transaction is subject to completion of both due diligence and a definitive purchase agreement.
energyOn.com, which was founded in 1998, will join APC's Small Systems Group upon completion of the acquisition.
Safe Harbor Provision
Statements contained in this press release which are not historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements are subject to risks and uncertainties which could cause actual results to differ from those projected. The factors that could cause actual results to differ materially include the following: APC's ability to complete the acquisition of energyOn.com in a timely and cost effective manner; the timely development and acceptance of new products; ramp up, expansion and rationalization of global manufacturing capacity; general worldwide economic conditions; growth rates in the power protection industry and related industries, including but not limited to the PC, server, networking and enterprise hardware industries; competitive factors and pricing pressures; changes in product mix; changes in the seasonality of demand patterns; inventory risks due to shifts in market demand; the effects of any other possible acquisitions; component constraints and shortages; risk of nonpayment of accounts receivable; changes in customer order patterns and product demand related to year 2000 purchasing issues; impact on the Company's business due to internal systems or systems of suppliers and other third parties adversely affected by year 2000 problems; the uncertainty of the litigation process including risk of an unexpected, unfavorable result of current or future litigation; and the risks described from time to time in the Company's filings with the Securities and Exchange Commission.
About American Power Conversion
Founded in 1981, American Power Conversion is a leading provider of global, end-to-end power protection products and services, which include surge suppressors, uninterruptible power supplies (UPS), power conditioning equipment, related software, and professional and consulting services for Nonstop Networking(TM). APC's comprehensive solutions, which are designed for both home and corporate environments, improve the manageability, availability and performance of sensitive electronic, network, communication and industrial equipment of all sizes. APC, which is headquartered in West Kingston, Rhode Island, reported sales of $1.337 billion for the year ended December 31, 1999. All trademarks are the property of their owners. Additional information about APC and its global end-to-end solutions can be found by accessing the APC World Wide Web site at www.apcc.com or by calling 800-877-4080.
For more information contact:
Media
Jodi Kennedy, APC director of media relations worldwide, 800-788-2208 ext.
2158, jkennedy@apcc.com
Investors:
Debbie Grey, APC investor relations manager, 800-788-2208, ext. 2994,
dgrey@apcc.com
(1) Businesses include commercial, government and educational institutions.
SOURCE American Power Conversion
CO: American Power Conversion; energyOn.com
ST: Rhode Island
IN: CPR MLM
SU: TNM
02/07/2000 16:18 EST prnewswire.com |
