PurchasePro signs pact with Boston firm

Wednesday, Dec. 1, 1999 | 11:23 a.m.

Las Vegas-based PurchasePro.com Inc. today announced it has signed a multimillion-dollar deal with Boston-based Advanstar Inc., a leading producer of business information publications.

Under terms of the agreement, PurchasePro.com will build 20 Internet-based "communities" designed to allow businesses to research, buy and sell products and services within specific industries. The sites will be integrated with the rest of PurchasePro's business-to-business network.

PurchasePro will receive $5 million to develop the sites, and an additional $1.6 million per year to maintain the sites. The two companies will share all revenues from transactions and advertising on the sites.

In addition, Advanstar will receive 350,000 warrants to purchase shares of PurchasePro stock, representing a 1.9 percent stake in the company. The exercise price of these warrants was not disclosed.

"The alliance will substantially enhance our rapid revenue growth by leveraging the revenue potential inherent in Advanstar's base of more than 3 million business customers worldwide," said Charles Johnson Jr., chairman and chief executive of PurchasePro. "This is a dramatic move for the long term growth of our company."

Advanstar owns and operates more than 70 interactive websites, and more than 100 business publications.

The deal sent PurchasePro's stock up more than 9 percent today. In early afternoon trading on Wall Street, PurchasePro was trading at $158.13, up $13.13.