VTCO news.............
Thursday February 17, 7:31 am Eastern Time
Company Press Release
SOURCE: Netdirect Corporation International
Netdirect to Acquire Major Competitor; Acquisition of HardwareStreet.com Expands Netdirect's Reach to Over 100 Million Additional Businesses and Consumers
MINNEAPOLIS, Feb. 17 /PRNewswire/ -- Leading business-to-business e-commerce company Netdirect Corporation International(TM)(Netdirect), formerly Virtual Technology Corporation (OTC Bulletin Board: VTCO - news), has signed a definitive agreement to acquire privately held HardwareStreet.com of Reno, Nev. HardwareStreet.com is a business-to-business e-commerce portal with an established Affinity Partner program that reaches over 100 million businesses and consumers. In 1999, HardwareStreet's operating revenues were $25 million. Following completion of the acquisition, Netdirect expects to be the leader in providing affinity groups with e-commerce technology marketplaces for their constituents to purchase a full array of technology-related products and services.
``HardwareStreet.com is a perfect fit for us,' said Greg Appelhof, Netdirect's president and CEO. ``The strategic direction of both companies in the business-to-business arena is remarkably similar in terms of keeping customer acquisition costs low and customer satisfaction levels high. Furthermore, the acquisition provides us with significant economies of scale which will help us reach our revenue and profit goals faster and increase shareholder value.'
The acquisition will enhance Netdirect's leadership position in business-to-business sales of technology-related products and services. Similar to Netdirect's private-label Community Techmart(TM) sites, HardwareStreet.com has relationships with over 60 ``Affinity Partners.' These partners include professional and consumer associations such as The American Dental Association and the AAA, as well as employee programs for Fortune 100 companies such as Microsoft, McDonalds and 3M. In all, these strategic partnerships will allow Netdirect to reach more than 100 million new businesses and consumers.
Netdirect recently expanded its online presence through a strategic relationship with Lycos, Inc., which allows Netdirect to reach the more than 32 million registered Lycos users through Lycos Shop (www.shop.lycos.com). Such strategic partnerships enable Netdirect to avoid the substantial costs faced by most e-commerce companies when marketing to the general public. They also allow Netdirect to tailor its marketing programs to the needs of each strategic partner's constituents, thus building customer loyalty and satisfaction and, consequently, increasing revenue.
Both companies have built reputations for reliability and superior customer service on their proprietary Web sites. These characteristics are important to affinity groups trying to provide value-added services and positive customer experiences to their member communities. In turn, successfully providing seamless service for affinity partners elevates Netdirect's awareness within the business-to-business market.
Under the terms of the agreement, HardwareStreet will merge into a wholly-owned subsidiary of Netdirect. In exchange, Netdirect will issue its Common Stock to HardwareStreet shareholders. Holders of convertible securities in HardwareStreet at the time of the closing will receive Nedirect convertible securities in exchange. A total of 12.5 million shares of Netdirect Common Stock will be issued to HardwareStreet shareholders or reserved for issuance upon the future exercise of their convertible securities.
Pending approval by the shareholders of both companies, by the board and shareholders of Netdirect and various closing conditions, including the filing and effectiveness of a registration statement with the U.S. Securities and Exchange Commission covering the securities issuable to the HardwareStreet securityholders, the acquisition is expected to close in the next few months. Netdirect expects to continue operations in Reno, Nev. following completion of the acquisition.
About Netdirect Corporation International
Netdirect is the global e-commerce company that offers businesses, consumers and communities of interest a better way to purchase a full array of technology products with unprecedented, personalized customer service and low prices. The company generates revenue from three related sales channels: online, catalog and wholesale. Its online sites include www.netdirect.com , which offers more than 60,000 hardware products, 100,000 software titles, 25,000 office products and thousands of consumer electronic products, and www.dtpdirect.com, as well as other co-branded and Community Techmart(TM) private label Web sites. Netdirect also generates revenue from its catalog company, DTP Direct, and GTI Distribution Services, an established technology products distribution company with direct relationships with more than 40 manufacturers that provides integrated e-commerce platforms and fulfillment capabilities for major customers, as well as all of Netdirect's operations.
About HardwareStreet.com, Inc.
HardwareStreet.com is a leading computer products and services e-tailer at the forefront of community-based marketing. By leveraging the loyalty that professional associations, academic institutions and other membership-based groups naturally foster with their constituents, HardwareStreet.com tailors its offerings to appeal to the distinct needs of every community it supports. Founded in 1997, HardwareStreet.com backs every community-specific relationship with its hallmark combination of brand-name products and services, exceptional customer service and a highly efficient ``100% Internet' business model.
Netdirect(TM) and Community Techmart(TM) are trademarks of Netdirect Corporation International.
Statements in this Press Release that are not purely historical are ``forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding Netdirect's expectations, hopes, beliefs, intentions or strategies regarding the future generally, Netdirect's growth strategy, future sales and anticipated trends in Netdirect's business. All forward-looking statements included in this Press Release are based on information known to Netdirect on the date hereof, and Netdirect assumes no obligation to update any such forward looking statements. It is important to note that actual results could differ materially from those in such forward looking statements as a result of a number of factors, most of which are out of the control of Netdirect, including, but not limited to, Netdirect 's early stage of development, its lack of profitability and cash flows and competition for the sale of hardware and software products both on and off the internet. HardwareStreet.com itself is not profitable and lacks working capital. Netdirect must raise additional equity or debt financing for its existing business operations and for that of HardwareStreet.com. Netdirect may not be successful at doing so on favorable terms, or at all. There is also no assurance that Netdirect will complete the HardwareStreet.com acquisition in the next several months or at all, that it can successfully and profitably integrate HardwareStreet.com's business into Netdirect's operations or that HardwareStreet will retain or grow its customer base or maintain or grow its operating revenues.
SOURCE: Netdirect Corporation International |
