ICG Commerce Exchanges Vows with ePValue
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Online procurement company ICG Commerce Tuesday struck a deal to merge with Andersen Consulting's ePValue, also an e-procurement venture.
Together, according to ICG Commerce and Andersen, the two companies, operating under the ICG Commerce moniker, will create the first truly global, comprehensive e-procurement services in the marketplace.
"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 Andersen Consulting'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."
The deal is expected to close in 45 days and the companies said the agreement will incorporate key operating and investment commitments by Andersen Consulting, Sun Microsystems and ICG Commerce. Sun is a strategic partner and stakeholder of ePValue. AC Ventures, Andersen's venture capital unit, and Sun will also gain equity positions in the expanded ICG Commerce, as will Sara Lee Europe, the combined company's first new customer. Sara Lee Europe has approximately $1 billion in indirect spend.
ePValue brings its multinational operations in North America and Europe to the table, as well as more than 250 employees, existing customers and $20 million in current actual revenues. ICG Commerce said the new company will have more than $10 billion in actual purchase transactions.
Through the merger, ICG Commerce is seeking to deliver superior speed, reach and scale to customers. The company will employ more than 550 professionals -- 350 in the U.S. and 200 in Europe and Asia/Pacific -- with an exclusive focus on procurement, including specialists in strategic outsourcing, category management, auctions and organization. ICG Commerce said the merged customer bases will nearly double its purchasing power.
ICG Commerce and Andersen have also agreed to create a global channel relationship and strategic alliance, with ICG Commerce serving as Andersen's preferred, cross-industry, turnkey e-procurement solution. Andersen will offer ICG Commerce's solution to its worldwide client base for indirect categories. Also, over time, ICG Commerce will manage Andersen's global indirect spend of more than $1.2 billion.
Under the deal, Sun will continue to function as the preferred hardware platform provider and 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 Andersen Consulting channel.
Rick Berry, president and chief executive officer of ICG Commerce, will head up the combined entity.