Under the terms of the all-share acquisition, Malvern, Pennsylvania-based Verticalnet issued 4.5 million shares to Digital Union stockholders. Up to 3.5 million additional shares will be added if Digital Union reaches certain revenue goals within 12 months of the deal closing. Based on the 4.5 million share issue and Digital Union’s closing price last Friday of $0.66, the acquisition is worth about $2.79m. The deal closed on Friday.
Verticalnet is one of the survivors of the online exchange craze that formed part of the dot-com boom and bust. It has since made the transition to become supply management provider providing a range of software and services including supply management and strategic sourcing. The Digital Union acquisition will enable it to add an on-demand, real-time sourcing, and procurement application and service set.
Previous acquisitions include Atlas Commerce, which built private exchanges; Tigris which contributed category management expertise, and B2eMarkets for its sourcing and contract management capabilities.
Verticalnet has followed a similar path to competitor Ariba Inc which was also a e-marketplace provider in its early days but reinvented itself as a supplier of spend management software and services. Ariba has also built its current application set on the back of a combination of in-house development and acquisition. Acquisitions have included supply management provider FreeMarkets, which was previously an Ariba and Verticalnet competitor.
Digital Union will operate as a Verticalnet company, keeping its own brand, but with its sales, marketing, and administrative functions combined with Verticalnet’s in Europe. Verticalnet and Digital Union will continue to deliver and support their existing products.
