eScout to Acquire Commerce

As part of the deal, Commerce One will obtain a seat on eScout's board of directors.

eScout LLC and Commerce One Inc. announced Thursday that eScout will acquire the Commerce marketplace, a business unit of Commerce One.

Commerce One currently has an equity stake in eScout. As part of the transaction, C1 is increasing its stake in eScout and will obtain a seat on eScouts board of directors.

Additional details of the acquisition, expected to close the first quarter of 2003, were not disclosed.

Essentially a purchasing company, eScout provides software and services for automating analytics, sourcing, procuring, reconciling and remitting processes.

The company also offers its own e-marketplace with ConnectScout, an integration hub that electronically connects organizations with their trading partners using either a requisition and procurement tool from eScout or an internal ERP-based purchasing system.

The sale brings to eScout all three of Commerce One.nets lines of business, including Marketplace Operations, Managed Applications Services and Content Operations.

Commerce Ones MAS business provides hosting services to companies in the U.S. looking to outsource the management and maintenance of C1 applications.

The Content Operations business, which has a library of more than 20 million catalog items, processed more than 278 million SKUs in the first three quarters of 2002, officials said.

In addition, the assets of Commerce One.nets trading partner contacts—buyers and suppliers—are included in the sale, along with its interoperability agreements, hosting and managed service contracts, technology and equipment and some intellectual properties that arent yet defined.

Commerce connects 38 buying organizations with over 1,500 suppliers and in the first three quarters of 2002, it processed over 896,880 purchase orders with transactions totaling over $1.5 billion in spend, according to officials in Pleasanton, Calif.

eScout boasts 25,000 customers.

Mark Hoffman, chairman and CEO of Commerce One, said the companys e-marketplace customers will continue to have easy access to thousands of trading partners through eScout and will benefit from the breadth of services offered by the combined e-marketplaces.

The combined company will remain private and be headquartered in Lees Summit.

Commerce One, for its part, will likely continue on its quest to become a viable Web services integration provider.

The company announced its plans in June 2002 and said then it would re-architect its 5.0 technology platform to become a Web services and integration platform, going head-to-head with both ERP and EAI [enterprise application integration] vendors pursuing their Web services integration strategy.