PurchasePro will pay stock and cash for the Boca Raton, Fla.-based company. The agreement, subject to regulatory approval, is expected to close during the second quarter, according to a PurchasePro statement.
The acquisition places Las Vegas-based PurchasePro in the rapidly growing strategic-sourcing industry, which analysts predict will grow from $300 million last year to $2.4 billion in 2005.
PurchasePro said the deal will allow it to provide software for companies of all sizes.
BayBuilder competes mainly with FreeMarkets, which boasts a reverse-auction service and strategic-sourcing technology that enables customers to have Internet access to an aggregated channel of their suppliers.
"Companies using expensive, service-based offerings from businesses like FreeMarkets are asking for alternatives," said Charles Johnson Jr., chairman and chief executive officer of PurchasePro, in a statement. "We believe that BayBuilder is the most advanced reverse-auction technology, enabling our company to continue its growth in the upper market while simultaneously driving its e-commerce solutions to our mass market."
Among BayBuilder's clients are Lennox, Lexmark International Group, and Owens Corning in industries including manufacturing, high tech, public sector, chemicals, automotive and energy.
Analysts recently praised PurchasePro for beating analyst expectations for the fourth quarter.