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Ariba snares SupplierMarket.com
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June 26, 2000: 7:41 p.m. ET
Executives say deal will extend reach, add new revenue streams
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NEW YORK (CNNfn) - Business-to-business e-commerce software maker Ariba Inc. said Monday it will buy privately-held SupplierMarket.com for roughly $581 million in stock.
Under the terms of a definitive agreement, Ariba will issue approximately 6.3 million shares of stock to purchase SupplierMarket.com. That represents less than three percent of Ariba fully diluted shares outstanding.
Ariba (ARBA: Research, Estimates) shares closed up 3-10/16 at 92-3/16 on Nasdaq Monday.
Based in Burlington, Mass., SupplierMarket.com operates an online B2B marketplace for industrial manufacturers who buy and sell manufactured materials. It uses online collaborative sourcing technologies that allow buyers and suppliers of direct and indirect materials to locate new trading partners.
The company employs 155 and has more than 7,700 registered buyers and more than 12,000 registered suppliers.
Executives at Ariba in Mountain View, Calif., said the deal will help them extend the reach of their B2B e-commerce platform and provide new revenue streams. 
"We believe sourcing is the next strategic high ground for B2B -- it is fundamental to our customers and partners as we work together to build liquidity in the B2B economy," Ariba chairman and chief executive Keith Krach said in a statement.
"This acquisition not only deepens the reach of the Ariba B2B commerce platform to new customers in new markets, but it also extends our value proposition to and business opportunities with our existing base of marketplaces, corporate exchanges, buyers, suppliers, commerce service providers and partners of all sizes," Krach added.
Ariba is one of the leading players in the fast-growing B2B e-commerce services sector. In April, the company reported its tenth consecutive quarter of increased revenue which, at $40 million, was up 322 percent from the corresponding quarter a year earlier. The company's operating loss for the quarter was $11.5 million.
Investors' affinity for Ariba and other B2B stocks, however, has waned amid growing concerns about valuations as well as the potential for profitability in the sector.
At Monday's close, Ariba's shares stood 49.7 percent below the 12-month high of 183-5/16 they reached in March. Meanwhile, at 26-5/8, the Merrill Lynch B2B Internet HOLDRs Trust, a security that tracks 20 B2B companies, was 76 percent below its high of 111. 
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