THREAD RE-ALERT
WFRC news.
quote.yahoo.com
Friday February 26, 5:02 am Eastern Time
Company Press Release
Wareforce.com Acquires Controlling
Interest in Online Auction Company
Move Could Potentially Drive 3 Million to 5
Million Shoppers to Wareforce's Online Catalog
LOS ANGELES--(BUSINESS WIRE)--Feb. 26,
1999--Wareforce.com Inc. (OTC BB:WFRC - news), a
single-source provider of information technology and technical services for Fortune 1000
companies, government agencies and educational institutions, Friday announced that the company
has signed a letter of intent to acquire 70 percent of uMember.com, an online auction sale
company.
Under the terms of the letter of intent, in exchange for its 70 percent interest, Wareforce will invest
in the continuing development and enhancement of uMember's online shopping and auction Web
site, as well as issue 30,000 restricted shares of Wareforce.com stock to the existing uMember
shareholders.
Under the agreement, Wareforce will offer exclusive uMember.com purchasing privileges to
employees of participating existing Wareforce corporate, government and education customers, a
captive audience estimated at 3 million to 5 million potential members.
These include employees of such organizations as Hughes, Northrop, NASA, TRW, Foundation
Health, World Bank, the University of California system, Disney, Universal Studios/MCA, the
National Association of Counties, the state of Florida and the county of Los Angeles, among
others. The exclusive membership-only club will be free to employees of Wareforce customers as
well as additional uMember users.
uMember.com expects users will be able to view and electronically purchase, in real-time, from
Wareforce's existing virtual warehouse of 140,000 different computer-related products, from
more than 900 major manufacturers, valued at more than $2 billion.
Wareforce.com is an authorized provider for leading manufacturers including Microsoft
(Nasdaq:MSFT - news), Compaq (Nasdaq:CPQ - news), Hewlett-Packard (NYSE:HWP -
news), IBM (NYSE:IBM - news) and Apple (Nasdaq:APPL - news). The site also plans to
provide consumer electronic products and appliances and travel and insurance services.
In addition, the site expects to feature links to a range of financial, sports, home and auto financing
Web sites. The company expects prices to be competitive with those of uBid (Nasdaq:UBID -
news), Onsale (Nasdaq:ONSL - news) and other online suppliers.
''The idea is to provide our customers' employees with a pleasant, secure shopping environment,''
said Orie Rechtman, chairman and CEO, Wareforce. ''Users and their families will be able to
enjoy a full range of products and services. They'll be able to use debit or credit cards and return
defective merchandise just as if they were shopping in their local mall.''
Under the agreement, Wareforce will own 70 percent of uMember's stock; Rechtman will assume
the additional position of chairman of uMember.com, and Leon Hason will continue as president.
uMember.com plans to make an initial public offering later this year.
According to Rechtman, the company expects to generate revenues from the uMember venture
through advertising and transaction fees in addition to the online sales. Automated product
ordering and fulfillment will be handled through Wareforce's current relationships with major
distributors of computer and electronic products, and through those, it plans to establish with
distributors in other product categories.
In addition, the company expects that online shoppers will benefit from volume discounts
negotiated with those manufacturers. All products can be drop-shipped, direct from the vendor to
the customer, eliminating the risks to Wareforce associated with maintaining a large volume of
inventory.
''We believe we will have a competitive advantage over many of the online sales and auction sites
operating today which struggle with back-office infrastructure and fulfillment capabilities,''
Rechtman continued. ''In recent years, Wareforce has invested heavily to bolster its fully
integrated systems to enhance its national and international capabilities.''
Wareforce.com has a history with business-to-business electronic commerce. Last year, for
example, Wareforce became a supplier of computer-related products in a first-of-its kind,
Web-based procurement system for the county of Los Angeles.
A strategic alliance between MCI/Worldcom, Commerce One and Wareforce, the system allows
county procurement officers access to Wareforce's extensive network of computer hardware and
software providers. Currently, the company is working to expand its distribution agreement with
Ingram Micro (NYSE:IM - news) and Techdata/Computer 2000 (Nasdaq:TECD - news) in
order to reach the European market, Rechtman said.
With rapidly accelerating internal growth and an aggressive acquisition strategy, Wareforce.com
has grown revenue from $2 million in 1990 to an expected run rate of more than $120+ million for
1998.
Wareforce.com is one of only 26 Large Account Resellers of Microsoft products in the United
States and has an exclusive contract with Apple to sell products to higher education institutions in
five states, including California, which comprises one third of the U.S. academic market. Both
contracts will benefit uMember users with product and pricing not available through the majority of
the existing online sites.
Wareforce.com is listed in Standard & Poor's Corporate Records, and has approximately 10.2
million outstanding shares. The company expects to file for listing on the Nasdaq National Market
System upon completion of its 1998 year-end audit, currently being conducted by Arthur
Anderson.
For online investor information, visit Wareforce.com on the World Wide Web at
www.wareforce.com.
This news release contains certain forward-looking statements that involve risks and uncertainties
that could cause actual results to differ materially from these forward-looking statements. Readers
are cautioned to consider these risks and uncertainties and not to place undue reliance on
forward-looking statements.
Contact:
Wareforce Inc.
Marcia Mazria, 310/725-5523
mmazria@wareforce.com
or
The Bohle Company
Gerry Ansel, 310/785-0515
gerry@bohle.com |
