Wareforce.com Acquires 70% Stake in Online Auction Firm
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Wareforce.com Inc., a provider of information technology and technical services for Fortune 1000 companies, government agencies and educational institutions, signed a letter of intent to acquire 70 percent of uMember.com , an online auction company.
Under the terms of the letter of intent, in exchange for its 70 percent interest, Los Angeles-based Wareforce will invest in the continuing development and enhancement of uMember's online shopping and auction Web site, as well as issue 30,000 restricted shares of Wareforce.com stock to the existing uMember shareholders.
Wareforce will offer exclusive uMember.com purchasing privileges to employees of existing Wareforce corporate, government and education customers, a captive audience estimated at 3 million to 5 million potential members.
These customers include employees of such organizations as Hughes, Northrop, NASA, TRW, Foundation Health, World Bank, the University of California system, Disney, Universal Studios/MCA, the National Association of Counties, the state of Florida and the county of Los Angeles, among others.
The site also plans to provide consumer electronic products and appliances and travel and insurance services.
In addition, the site expects to feature links to a range of financial, sports, home and auto financing Web sites. The company said it expects prices to be competitive with those of uBid, Onsale and other online suppliers.
"The idea is to provide our customers' employees with a pleasant, secure shopping environment," said Orie Rechtman, chairman and CEO of Wareforce. "Users and their families will be able to enjoy a full range of products and services. They'll be able to use debit or credit cards and return defective merchandise just as if they were shopping in their local mall."
Rechtman will assume the additional position of chairman of uMember.com. Leon Hason will continue as president. uMember.com plans to make an initial public offering later this year.
Rechtman said the company expects to generate revenues from the uMember venture through advertising and transaction fees in addition to online sales. Automated product ordering and fulfillment will be handled through Wareforce's current relationships with major distributors of computer and electronic products.