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Technology Stocks : VerticalNet, Inc. [VERT] -- Ignore unavailable to you. Want to Upgrade?

To: Sarkie who wrote (813)	2/23/2000 10:38:00 PM
From: Techplayer	Respond to of 1094

From U.S. Bancorp Piper Jaffray 08:25am EST 23-Feb-00 USBancorp Piper (Timothy M. Klein 612-342-5544) VERT VerticalNet (VERT): Expands NECX Division With Acquisition; Strong Buy * U.S. Bancorp Piper Jaffray * U.S. Bancorp Piper Jaffray *** VerticalNet, Inc. (VERT - 196 ) February 23, 2000 Timothy M. Klein, 612-342-5544, tklein@pjc.com/Allison Y. Gage, 612-342- 6425, agage@pjc.com Expands NECX Division With Acquisition Of R.W. Electronics, The Fifth Largest Exchange In Electronic Components Industry For $80 Million; Move Reinforces Aggressive Hybrid Offline/Online Growth Strategy; Maintain Rating And Estimates Rating: Strong Buy, Aggressive (#) Price: $196 52-Week Range $289 9/16 - $17 3/8 FY End:December 12-Mth Price Tgt (45x FY01 Revs)$ 290 Shares Out (Mil) 35.9 EPS 1999 2000E* 2001E* Market Cap (Mil) $7,036 Mar ($0.18) ($0.55) ($0.18) Avg Daily Vol (Mil) 1.435 Jun ($0.19) ($0.57) ($0.07) Sep ($0.69) ($0.45) $0.06 Consensus FY00 EPS ($1.61) Dec ($0.28) ($0.33) $0.20 Consensus FY01 EPS ($0.52) FY ($1.37) ($1.90) $0.01 P/E NM NM NM Market Cap/FY00 Revenues 61x Market Cap/FY01 Revenues 31x Revs (Mil) 1999 2000E 2001E Mar $1.93 $17.8 $45.8 Jun $3.55 $23.1 $52.4 Sep $5.18 $33.2 $60.3 Dec $10.09 $41.0 $69.1 Qtr End March 31, 2000 FY $20.76 $115.1 $227.6 Est Rep Date Mid-April 2000 *Note EPS excludes noncash charges of amortization and warrants Highlights: --R.W. Electronics Acquisition Continues Hybrid Strategy Of Building Online Volume Through Offline Relationships. NECX's acquisition of Real World reinforces VerticalNet's strategy of leveraging its online presence and strong currency to migrate transaction volume from offline to online. Real World is the fifth largest electronic components market maker, overlapping with 14 of VerticalNet's current trading communities, and its acquisition represents another strong step by the Company toward building critical mass in the marketplace. We believe that this hybrid strategy is necessary to build liquidity and establish leadership in net market places. --Real World Is Known For High Productivity And Value Added Services. The key assets in these market-making firms are the traders and Real World has some of the best, as the firm's productivity is tops in the industry ($2.8 million/ee versus $1.8 million for NECX). Real World provides open and spot- market services and value-added services like end-of-life inventory management and custom purchasing programs. Its 8,500 trading partners is largely additive to NECX's 18,000. --Deal Details. Deal was a purchase transaction for $80 million ($10 million cash/$70 million stock). Real World had gross sales of $170 million in 1999 with almost $20 million in net revenues for gross margins of 11.5%. We will revise estimates once the acquisition is closed. Company Description VerticalNet owns and operates a portfolio of 55 vertical trade communities, industry-specific and individually branded Web sites dedicated to serving a highly targeted audience of industry professionals and participants. The Company's "vertical" portfolio approach allows the Company to serve each industrial sector in-depth, giving business professionals highly targeted content, community, and commerce opportunities. The trade communities are organized into 10 primary sectors, such as communications, health care/sciences, and food/packaging. Each community offers in-depth and up- to-date information on the most relevant industry news and trends, community and chat, and e-commerce centers with products and services available to purchase online or via catalog. In addition, VerticalNet will soon be offering auction and exchange capability, further building one of the Web's leading platforms focused on fostering greater trade and communication among professionals. Some or all of the following hedges may pertain: (#)U.S. Bancorp Piper Jaffray Inc. makes a market in the company's securities. (~)A U.S. Bancorp Piper Jaffray Inc. officer, director, or other employee is a director and/or officer of the company. (@)Within the past three years, U.S. Bancorp Piper Jaffray Inc. was managing underwriter of an offering of, or dealer manager of a tender offer for, the company's securities or securities of an affiliate. Additional information is available upon request. Not FDIC Insured No Bank Guarantee May Lose Value This material is based on data obtained from sources we deem to be reliable; it is not guaranteed as to accuracy and does not purport to be complete. This information is not intended to be used as the primary basis of investment decisions. Because of individual client requirements, it should not be construed as advice designed to meet the particular investment needs of any investor. It is not a representation by us or an offer or the solicitation of an offer to sell or buy any security. Further, a security described in this publication may not be eligible for solicitation in the states in which the client resides. U.S. Bancorp Piper Jaffray individual officers, employees, or members of their families may own the securities mentioned and may purchase or sell those securities in the open market or otherwise. In the United Kingdom, this report may only be distributed or passed on to persons of the kind described in Article 11(3) of the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996 (as amended by the Financial Services Act 1986 (Investment Advertisements) (exemptions) Order 1997). Securities products and services offered through U.S. Bancorp Piper Jaffray Inc., member of SIPC and NYSE, Inc., a subsidiary of U.S. Bancorp. (c)2000 U.S. Bancorp Piper Jaffray Inc., 222 South Ninth Street, Minneapolis, Minnesota 55402-3804 piperjaffray.com First Call Corporation, a Thomson Financial company. All rights reserved. 888.558.2500