Internet grocer Peapod Inc. concluded a restructuring
transaction in which it consolidated its licensing business into the newly
formed Split Pea Software, Inc. and spun-off majority ownership of the new
company.
During the fourth quarter of 1998, Peapod completed the installation of its
Internet grocery shopping and delivery systems under its license agreement
with Coles Myer Ltd., and entered into further agreements to develop additional
enhancements. Coles Myer Ltd. is Australia’s largest retailer. Split Pea will
seek to build on the success of the Coles Myer relationship by further
licensing its Internet grocery shopping systems.
In the transaction, Peapod assigned to Split Pea certain technology rights,
including the perpetual license of Peapod’s online grocery shopping and
delivery systems.
Split Pea’s marketing efforts will focus both internationally and
domestically, and will include other markets requiring high-SKU, data-
intensive e-commerce systems. Additionally, Split Pea will pursue licenses of
its SuRF technology for multiple consumer and business-to-business
applications, and will provide custom development for Internet services.
“This transaction should benefit Peapod in several ways,” said John C. Walden, Peapod’s chief
operating officer. “First, we have built significant value
in our systems that we believe can be exploited and generate meaningful future
value. Split Pea, as an independent entity, now has the flexibility to invest
and grow without constraints that may exist as a part of Peapod. More
importantly for Peapod, the new structure allows the company to concentrate
its resources on its core Internet grocery business.”
Split Pea has appointed John B. Burchard, formerly vice president of sales and
service for Peapod’s licensing business, as president of Split Pea Software
Inc.
A group of the new company’s senior managers holds majority equity ownership
of Split Pea, while Peapod owns a minority interest along with certain
promissory and convertible notes from Split Pea. To fund future growth, the
new entity is likely to pursue additional private financing from strategic or
financial partners.
