MENLO PARK, Calif. & FAIRFIELD, Conn.--(BUSINESS WIRE)--June 24, 2002--Francisco Partners, the world's largest technology buyout fund, today announced a definitive agreement with General Electric Company (NYSE: GE) to acquire GE's business-to-business (B2B) e-commerce company, GE Global eXchange Services (GXS).
The boards of directors of both companies have approved the agreement, and the transaction is expected to close by October 31, 2002. Harvey Seegers, current president and CEO of GE Global eXchange Services, will continue to lead the company, which will become part of the portfolio of technology businesses owned by Francisco Partners. GE will retain a 10% ownership stake in GXS.
GE Global eXchange Services operates one of the largest B2B e-commerce networks in the world, with more than 100,000 trading partners. GXS provides e-commerce solutions that help businesses improve the quality, velocity and efficiency of their supply chains. GXS's extensive global customer base includes more than 60% of the Fortune 500 and their respective supplier communities.
"Global eXchange Services is the premier B2B e-commerce company in the world today and enjoys a rich history of more than 35 years leading the development of this market," said David Stanton, a Partner at Francisco Partners. "Francisco Partners will provide GXS with the support necessary to acquire other electronic commerce solution companies in the future, as well as attract and retain key talent to accelerate its growth."
Francisco Partners specializes in buyout and recapitalization investments in technology companies, targeting majority and minority investments in private and public companies, with transaction values ranging from $50 million to in excess of $2 billion.
"This is an exciting opportunity for our customers, employees and investors. GXS will continue to have strategic flexibility and access to capital markets to build on our track record of innovative products and services," said Harvey Seegers, president and CEO of GE Global eXchange Services. "We will continue to deliver world-class technology as companies digitize their global supply chains and drive important productivity initiatives."
"GXS employees have done a great job building a very successful company," said Gary Reiner, Senior Vice President and Chief Information Officer at General Electric. "However, GXS does not fit GE's core services and growth strategies. We remain committed to maintaining our leadership in digitization, with GXS remaining an important supplier of electronic commerce solutions, and we wish GXS employees and customers continued success."
The transaction values GXS at $800 million and when completed, the divestiture is expected to result in a pre-tax gain of approximately $500 million to GE. GE's advisors in the transaction were Morgan Stanley and Shearman & Sterling.
Caution Concerning Forward-Looking Statements
This document includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in global political, economic, business, competitive, market and regulatory factors. More detailed information about those factors is contained in GE's filings with the Securities and Exchange Commission.
About GE
GE (NYSE: GE) is a diversified technology, services and manufacturing company with a commitment to achieving customer success. GE operates in more than 100 countries and employs approximately 310,000 people worldwide. For more information, visit the company's Web site at http://www.ge.com.
About Francisco Partners
With $2.5 billion in committed capital, Francisco Partners is the world's largest technology focused buyout fund. The firm has built one of the industry's most experienced teams focused on structured investments in technology and technology-related businesses. For more information, visit the company's Web site at http://www.franciscopartners.com.
About GE Global eXchange Services (GXS)
GE Global eXchange Services operates one of the largest B2B e-commerce networks in the world, with more than 100,000 trading partners. The network's 1 billion annual transactions account for $1 trillion in goods and services. For more information, visit the company's Web site at http://www.gxs.com.
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CONTACT:
General Electric, Fairfield
David Frail, 203/373-3387
or
GE Global eXchange Services
Reid Walker, 301/340-5985
or
For Francisco Partners
Doug Donsky of Edelman Financial
212/704-4473