VerticalNet and Sumitomo enhance Strategic Relationship; Global Industrial Conglomerate to Purchase $30 Million in VerticalNet Common Stock
HORSHAM, Pa.--(BUSINESS WIRE)--Nov. 1, 2000--VerticalNet Inc. (Nasdaq:VERT), the Internet's leading enabler of business-to-business e-commerce, announced today that Sumitomo Corp. (NIKKEI:SC), Tokyo, has signed a definitive agreement to purchase US$30 million in VerticalNet common stock through a private placement transaction.
Sumitomo, one of Japan's largest integrated trading companies with more than $47 billion in assets, and VerticalNet have also agreed to cooperate on a variety of joint initiatives, including the potential creation of VerticalNet Exchange Japan, which would follow on the heels of their successful NECX Asia joint venture. Additionally, Sumitomo may potentially participate as an equity partner in VerticalNet's international endeavors, and may license or distribute technology, products and services from VerticalNet Solutions and VerticalNet Markets.
"Sumitomo's long-standing relationships in diversified global industries will be invaluable as we expand our international operations," commented Joe Galli, President and CEO of VerticalNet. "This relationship will augment both our operations and our brand as we further extend the developing synergies of our e-commerce and Exchange operations into the global arena."
Instrumental in the joint venture's creation, Larry Marshall, president of NECX Exchange, and David Kostman, president or International, expressed their satisfaction with the alliance. "We have been working with Sumitomo organization for more than two years, and have launched a highly successful operation that has already created more than $70 million in transactions," said Marshall. "We look forward to expanding this relationship and will initially focus our cooperation on exchanges to pursue new business opportunities, alliances and transactions in global e-commerce markets."
"Sumitomo has a tremendous global presence across many industrial sectors," said Mr. Atsushi Nishijo, Managing Director of Sumitomo. "Given our 400 years of experience as international traders, we see this as a natural evolution for our integrated trading business. The combination of our expertise in sectors Such as aerospace, automotive, plastics, metals, and finance, and VerticalNet's leadership in creating and operating online exchanges and marketplaces with its enabling software infrastructure, is tremendous and will position the two companies in the forefront of global B2B e-commerce."
The private placement transaction is expected to close following the receipt of regulatory approvals and the completion of customary closing conditions. Under the terms of the agreement, the common shares purchased by Sumitomo will remain unregistfred for at least one year.
About VerticalNet, Inc.
VerticalNet, Inc. (www.verticalnet.com) provides end-to-end e-commerce solutions targeted at distinct business segments through three strategic business units: VerticalNet Markets includes 57 industry-specific digital marketplaces designed as online vertical trading communities and provides hosted e-commerce and community capabilities for corporate divisions and mid-size businesses; VerticalNet Exchange focuses on direct material open and spot markets; and VerticalNet Solutions builds digital marketplaces for global 2000 customers, consortiaand neutral Net market makers. VerticalNet International leverages the Company's three strategic business units to create global Internet B2B marketplaces, offering products and services internationally and partnering with companies that have strong local presence and domain expertise.
About Sumitomo Corp.
Sumitomo Corporation (http://www.sumitomocorp.co.jp) is one of the world's leading traders and distributor of commodities, industrial goods, and consumer goods. Besides its role as a trader, Sumitomo Corporation is increasingly active as an investor in a diverse range of businesses that mesh witX existing operations, or that position the company in markets with long-term potential. Sumitomo Corporation is also a major dominant player in the Japanese IT/media market, with investments in the largest leading CATV operation, Jupiter Telecom; a joint venture with Liberty Media; Jupiter Programming, a content provider for CATV and other digital broadcasting; @Home-Japan, a joint venture with @Home; and strategic partnerships with CMGI, and other internet businesses, such as Lycos Japan. Sumitomo Corporation has a staff of 8,192 throughout Japan and in 88 other countries.
This announcement contains forward-looking statements that involve risks and uncertainties, including statements relating to (i) the expectation that VerticalNet and Sumitomo will receive the requisite regulatory approvals and fulfill the other closing conditions in order to close the proposed transaction; (ii) the parties' ability to expand and enhance their existing strategic relationship and their intention to focus initially on exchanges, as well as to pursue new business opportunities, alliances and transactions in global e-commerce markets; (iii) the parties' expectation of forming VerticalNet Exchange Japan; (iv) Sumitomo's potential future participation as an equity partner in VerticalNet's international endeavors; (v) the possibility that Sumitomo may license or distribute technology, products and services from VerticalNet Solutions and VerticalNet Markets; (vi) VerticalNet's ability to expand internationally; (vii) VerticalNet's expectation that its partnership with Sumitomo will augment both VerticalNet's brand and operations as it extends its developing synergies between its e-commerce and exchange operations into the global environment; (viii) the expectation that Sumitomo and VerticalNet can be positioned in the forefront of B2B e-commerce; and (ix) statements that are preceded by, followed by or include the words "believes," "plans," "intends," "expects," "anticipates," "potential," "possible," or similar expressions. For such statements, VerticalNet claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from the results predicted, and reported resultsshould not be considered as an indication of future performance. Numerous factors could cause actual results to differ from those contained in the forward-looking statements, including those factors set forth in VerticalNet's Annual Report on Form 10-K for the period ended December 31, 1999 and its quarter report on Form 10-Q for the period ended June 30, 2000, both of which have been filed with the SEC. VerticalNet assumes no obligation to publicly update or revise any of the forward-looking statements that may be in this announcement.
VerticalNet and NECX.com are registered trademarks and/or trademarks of Vert Tech LLC in the United States and/or other countries.
CONTACT:
VerticalNet Inc.
Muriel Lange, Investor Relations, 215/315-3367
mlange@verticalnet.com
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