Ariba, FreeMarkets Merger Gets Stockholders' OKAriba, FreeMarkets Merger Gets Stockholders' OK
The combined companies aim to provide sourcing tools and consulting services to automate processes, offering a global reach that gives customers access to more than 400 commodity and sourcing experts.
June 29, 2004
It's a done deal. Stockholders yesterday from both companies voted to approve the merger between Ariba Inc. and FreeMarkets Inc. Their intent to merge the companies, announced in January, is expected to officially close on Thursday. (See Ariba Shells Out Almost $500 Million For FreeMarkets .) That's when the combined organization will emerge with services and solutions ranging from spend analysis, E-procurement, and transaction processing to auction services for sourcing and procurement.
Although the merger process took approximately five months to complete, there were no hold-ups or detours, says Sundar Raghavan, VP of solutions strategy at Ariba. "In a post Sarbanes-Oxley world, it's no longer unusual for the process to take a couple of months longer, especially when a 1,000-employee company with approximately $235 million in annual revenue merges with another of a similar size," he says. "The longer process is a result of regulatory agencies such as the Securities and Exchange Commission, Department of Justice, and Financial Trade Commission [doing a] more-stringent review process requiring additional supporting documents." When the deal closes on July 1, Ariba will make effective a six-for-one reverse stock split also approved by the stockholders and board. A combined management team from both organizations will lead the new Ariba. Ariba's Bob Calderoni will remain CEO and chairman, while FreeMarkets president and CEO Dave McCormick will assume the role of Ariba's president. The new company aims to provide sourcing tools and consulting services to automate processes, with an expanded global reach that gives customers access to more than 400 commodity and sourcing experts. The combined team will have more than 1,600 employees, a global presence in 21 countries, and more than 500 customers, many of which are Fortune 100 companies, according to the vendors.
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