Agreement to result in expanded global footprint and over $10 billion in spend under management
PHILADELPHIA and PALO ALTO, CA (November 15, 2000) -- ICG Commerce and Accenture’s e-procurement venture, also known as ePValue -- both leading providers of end-to-end e-procurement services -- today announced that they intend to merge. The combination will instantly create the first truly global, comprehensive e- procurement services provider in the marketplace. The newly combined companies will operate under the ICG Commerce name.
The agreement, when executed, will incorporate key operating and investment commitments by Accenture and ICG Commerce. In conjunction with ePValue’s merger into ICG Commerce, and the assimilation of ePValue’s operations and customer base, both Accenture Technology Ventures, the venture capital unit of Accenture, and Sun Microsystems (NASDAQ: SUNW) -- a partner and equity owner of ePValue -- will gain equity positions in the expanded ICG Commerce. In addition, Sara Lee Europe, the combined entity’s first new customer with approximately $1 billion in indirect spend, also intends to take an equity stake in ICG Commerce.
The deal, which the parties expect to close within 45 days pending execution of definitive agreements and governmental approval, leverages the significant momentum and capabilities of both companies to create the largest, most fully operational e-procurement services company in the market. It will combine ePValue’s multinational operations in North America and Europe, more than 250 employees with deep procurement experience, existing customers, and $20 million in current actual annual revenues with ICG Commerce’s existing operations and breakthrough comprehensive end- to-end e-procurement approach. The merged entity will have over $10 billion in actual purchase transactions under the leadership of ICG Commerce’s president and CEO, Rick Berry.
For customers, the newly expanded ICG Commerce will seek to deliver the most effective procurement capability available through superior speed, reach and scale. Specifically:
Speed: ICG Commerce will uniquely provide large multinationals and mid-sized companies immediate access to fully operational, turnkey global e-procurement capabilities. ePValue adds a total category management outsourcing capability, particularly relevant to large, global companies, to ICG Commerce’s existing exchange- based offering that requires no upfront capital investment in software. Reach: ICG Commerce will employ more than 550 professionals globally whose exclusive focus is procurement. This includes 350 in the U.S. and over 200 in Europe and Asia/Pacific. These professionals include specialists in strategic sourcing, category management, auctions and Internet-based procurement, supported by a global customer care organization. The number of specialists dedicated to each of these specific procurement categories contained within a single company is viewed by ICG Commerce and Accenture as unprecedented. Scale: The merged customer bases will nearly double the purchasing power of ICG Commerce, thus allowing for even greater customer savings. This purchasing power, combined with the over 550 procurement specialists available for deployment, can support the full breadth of a particular company’s procurement needs.
In the second major aspect of the agreement, Accenture and ICG Commerce will enter into an agreement to effect a global channel relationship and strategic alliance. ICG Commerce will serve as Accenture’s preferred, cross-industry, turnkey e- procurement solution and will be offered to its worldwide client base for indirect categories. Accenture views this as an important additional means to create substantial value for its clients, more rapidly and with greater certainty than other approaches.
With the merger, the expanded ICG Commerce will, over time, manage Accenture’s global indirect spend totaling in excess of $1.2 billion. Further, Accenture’s existing team of approximately 50 procurement professionals located in five countries will be offered opportunities to join ICG Commerce, bringing with them extensive category management experience and account management skills.
The final aspect of the agreement calls for Sun Microsystems, already a provider of hardware to both ePValue and ICG Commerce, to continue to function as a preferred hardware platform. Further, iPlanet E- Commerce Solutions, a Sun-Netscape Alliance and the core of ePValue’s existing global procurement technology, will be offered as a preferred solution for customers secured through the Accenture channel.
"Without question, the B2B e-procurement services marketplace is experiencing rapid consolidation as companies join forces to create greater levels of value that customers expect and deserve," said Bill Copacino, Global Managing Partner of Accenture’s Supply Chain service line. "Our merger agreement with ICG Commerce is a huge step toward establishing a global leadership position in indirect e-procurement through the synergistic combination of our experiences, client relationships and operations."
"This watershed agreement with global industry leaders Accenture, ePValue, and Sun is clearly accelerating the speed at which we are making our vision for ICG Commerce and Internet-enabled procurement become a reality. All of us share a common vision and commitment to taking a central and leadership role in driving the future of the industry as it consolidates and takes real form," said Rick Berry, president and CEO of ICG Commerce. "We hope this agreement, coming right on the heels of our recent announcement regarding EDS/CoNext, enables us to become the world’s most successful and results-driven provider of procurement services for today’s businesses."
About ICG Commerce
ICG Commerce is the world’s first comprehensive online procurement services provider for businesses. Leveraging its wealth of supply chain management, purchasing and strategic sourcing expertise across multiple industry groups, ICG Commerce delivers comprehensive, tailored services built around a flexible, Internet-based platform that requires minimal start-up cost and time and no software purchase or installation. ICG Commerce can effect the entire spectrum of purchasing strategies, including aggregated buys, portals and exchanges, hosted auctions, eRFQs/eRFPs, spot buys and catalog purchases. The company is uniquely positioned to help customers streamline all of their procurement decisions and processes and to effect substantial savings and efficiencies. ICG Commerce is a member of the Internet Capital Group (NASDAQ: ICGE) network of partner companies, and is based in Jenkintown, Pa. Its home page address is www.icgcommerce.com .
EPValue is an internet-enabled B2B market maker offering turnkey procurement services for the Global 2000. EPValue provides indirect procurement, supply management, procurement operations, and business information services through a global network of commodity-focused procurement specialists using full business scope, end-to-end procurement technologies powered by Sun and iPlanet. EPValue’s customers include multinational companies cross industry, including pharmaceuticals, automotive, chemicals, high technology, and professional services. Its home page address is http://www.ePValue.com. About Sun Microsystems Since its inception in 1982, a singular vision — "The Network is The Computer"— has propelled Sun Microsystems (NASDAQ: SUNW) to its position as a leading provider of industrial-strength hardware, software and services that power the Internet and allow companies worldwide to ".com" their businesses. With $14 billion in annual revenues, Sun can be found in more than 170 countries and on the World Wide Web at http://www.sun.com.