Scouting for a More Perfect B2B Platform

Two providers of online trading applications, eScout and Perfect Commerce, Wednesday said they would merge to create a unified product line they say will allow for better B2B transactions from sourcing through electronic invoicing and payment.

Launched in 1998, Kansas City, Mo.-based eScout operates a supplier network that connects with a wide variety ERP applications, available via a utility pricing model. Palo Alto, Calif.-based Perfect Commerce provides software modules to handle and track procurement operations involving suppliers.

eScout chairman and CEO Sandy Kemper said that the merger would complete his company’s offering for what’s known as supplier relationship management, or SRM.

“Perfect brings the strongest sourcing platform in the country today,” Kemper told “All the stuff that we do is usually preceded by a company’s desire to engage in strategic sourcing, so we were missing out on the early stage.”

Kemper will remain the chairman and CEO, while Perfect’s president and CEO, James McCormick, will become the president and COO of the combined company, which will be renamed and re-branded later this month. The all-stock transaction is expected to close during the third quarter of the calendar year 2003, with technology integration completed by the fourth quarter. Approximately 25 of the companies’ combined 150 employee positions will be eliminated.

The new company will remain privately held and headquartered in Lee’s Summit, Missouri, with corporate offices in Palo Alto and San Diego, California, as well as in Las Vegas, Nevada.

Kemper said the merger is also beneficial in that it allows Perfect to tap into the assets of, which eScout acquired in December 2002.

According to the companies, in the first half of 2003 they handled over 1.8 million transactions between the two of them, with combined dollar volumes approaching $1.9 billion. The combined customer list will include over 100 Global 2000 companies and more than 7,500 suppliers.

eScout’s investors include Mayfield Fund; Oak Hill Venture Partners; UMB Financial, Harris Bank and Bank of Montreal. Kemper said no new rounds are planned in the near future.

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