Ariba went public six months prior in June 1999 with a market capitalization of $983 million, according to Dealogic.īut at least both companies are not ending their independence with an ignominious end. The price tag for FreeMarkets is a far cry from where Goldman Sachs priced FreeMarkets back in December 1999 when the company was offered to the public at a market valuation of $1.6 billion. Morgan Stanley advised Ariba while Goldman Sachs advised FreeMarkets. The companies expect profit margins to rise toward 10 percent by the end of this year.

The combined companies will have $360 million in total annual sales, $290 million in assets on its balance sheet and virtually no debt.

By merging, the companies expect to save about $25 million on an annualized basis within nine months after closing the deal. Still, Ariba has strength in financials while FreeMarkets has strength in automotives.Ĭurrently, both companies operate at roughly breakeven. About 20 to 30 percent of Ariba's customers are also FreeMarkets' customers, said Ariba Chairman and CEO Bob Calderoni, who will continue to lead the combined company. They grew up focusing on different industries, but still found themselves competing for the same customer. Ariba and FreeMarkets both have software and systems that let companies buy products, and plan purchases more efficiently. The merger combines two software and services start-ups born in the Internet heyday of 1999, a record year for Internet IPOs. It's the typical life cycle: Start-ups emerge, compete and then eventually combine FreeMarkets shareholders receive $2 in cash and 2.25 of Ariba's stock for each share they own. Shares of Ariba rose 2 cents to $3.77 while FreeMarkets shares shot up 16 percent to $9.71 on the news.

Ariba purchase