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Outpost.com Acquires CMPExpress

Cyberian Outpost's Outpost.com , an Internet retailer of high-end consumer technology products, will acquire CMPExpress, a privately held online retailer of technology products to the business market, in a $12 million, all-stock deal.

The move gives Outpost.com, which has seen its stock drop into the $3 range from an all-time high of over $45, a foothold in the B2B market. Outpost was trading at $4.75 at mid-day.

The transaction will be immediately accretive to earnings and is expected to close within a week, Outpost said.

CMPExpress, which has been selling on the Web since 1996, has offices in Toms River, NJ, and Brookhaven, PA. The company had sales of $42 million in 1999 and, with a current average order size in excess of $1,100, generated sales of approximately $40 million in the first eight months of this year.

"This acquisition represents a terrific opportunity for Outpost.com that will generate positive earnings immediately, as well as positive cash flow," said Bob Bowman, president and chief executive officer of Outpost.com.

"We currently have a highly successful B2C business and an electronic Business Services division that includes clients like Brookstone, Tweeter and Wolf Camera. Combining these businesses with an established B2B group with an outstanding reputation like CMPExpress, gives Outpost.com three strong business components."

The B2B business will be called OutpostPRO, and Bowman predicted it would exceed $100 million in sales by fiscal year-end.

The revenue certainly will be needed; Outpost has reported four quarterly losses in a row and the current consensus of analysts is that the quarter ending in August will see the company reporting another loss, of 26 cents a share, according to ThomsonInvest.net.

Bryn Kaufman, CMP founder, was named vice president for technology for Outpost.com's new B2B operations, reporting to Raymond Karrenbauer, chief technology officer for Outpost.com.

Outpost.com's existing B2B business will be merged into CMPExpress and the combined business will now represent approximately 25 percent of Outpost's total sales.