Internet Capital Group Wednesday sealed its largest acquisition to date, taking a majority stake in privately-held RightWorks for $657 million in cash and stock.
RightWorks provides procurement software used by business-to-business exchanges. The company has several well-known customers, including Wells Fargo, VerticalNet and ShopNow.com. Digital marketplaces, where buyers and sellers are electronically linked, are expected to account for more than half of all e-commerce revenues by 2005.
Internet Capital (ICGE) plans to use RightWorks’ technology to strengthen its support for online trading communities. The deal is part of the company’s strategy to construct digital marketplaces in the world’s 50 top markets.
“RightWorks is the emerging industry standard to operate B2B exchanges and we have joined forces with RightWorks to accelerate the adoption of its technology by market matkers worldwide,” said Mary Coleman ICG’s director of operations.
“Our acquisition of a majority stake in RightWorks helps accelerate our strategy of bring business buyers and sellers together in open, highly-efficient digital marketplaces.”
Vani Kola, RightWorks founder and chief executive officer, said the deal is an affirmation of the importance of digital marketplaces.
“We are excited that, as the leader in B2B e-commerce, ICG shares our visionand sees the same position we do for RightWorks to become the global industry leader in B2B exchanges and e-procurement,” he said.
Kola said RightWorks will gain new distribution channels through its partnership with ICG and will be able to leverage ICG’s European and Asian presence to more quickly gain a foothold in those regions.
He emphasized RightWorks will continue to operate as an independent company which he intends to take public sometime in the future.