Freemarkets to buy Covisint auto e-auctioning business

Global e-auctions and procurement software services firm Freemarkets is to buy the web trading arm of Covisint, the independent web exchange developed by most of the global automotive OEMs in the heat of the web hype era. The deal, which involves undisclosed sums, is expected to close this month, and it means FreeMarkets will move up to the leading sourcing technologies and services firm for the automotive sector. The firm will, for example, provide e-services to DaimlerChrysler, General Motors and Ford under existing Covsint agreements, using its own sourcing technology and services. FreeMarkets may also provide its solutions to OEMs like Mitsubishi, Nissan, Renault, PSA Peugeot, Fiat and the other Covisint customers. The firm is not without pedigree in automotive. To date, FreeMarkets has helped companies in the industry source more than $20bn in goods and services, and claims savings of more than $3.5bn. “Covisint has had a very successful year in which we more than doubled our user base,” says Bob Paul, Covisint CEO. “The sale of our auction services to FreeMarkets is a logical and evolutionary step as we continue to focus our strategy on … delivering supplier management portals and data messaging services. “We began building our auction service business when the technology was in its infancy and it is now time to turn it over to someone that has sourcing technology and expertise as a core competency.”