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For Immediate Release
IPO, Sale of Equity Interest Under Consideration as Company Moves to Accelerate
E-Commerce Growth
Washington, D.C., (March 16, 2000) - US Office Products Company
(NASDAQ: OFIS) today announced that it will explore strategic opportunities to accelerate
the rapid growth of its Mail Boxes Etc. ("MBE") subsidiary and has engaged the investment
banking firm of Credit Suisse First Boston to assist in this process. Possible transactions
under consideration include an initial public offering of MBE stock and/or the sale of an
equity interest in MBE to one or more strategic investors. It is expected that such
strategic investor(s) would bring both commercial expertise and additional capital to the
relationship, allowing MBE to maximize its growth prospects.
"MBE has rapidly differentiated itself and created distinctive new value by offering
a powerful solution to the challenge of e-commerce fulfillment," said Warren D. Feldberg,
president and chief executive officer of US Office Products. "It's an excellent time for
us to consider a range of strategic options that will accelerate MBE's e-commerce growth
plans in a very attractive and dynamic market space."
MBE, the world's largest franchise network of business service centers, is rapidly
becoming an active participant in the e-commerce marketplace. Through strategic alliances
with e-commerce business partners and an Internet-based platform that links nearly all of
its domestic locations, MBE is poised to leverage its brick-and-mortar presence as the
"store front" for Web-based merchants and service providers.
"With more than 4,100 locations worldwide, a customer-service culture, and our use
of advanced technology, MBE is uniquely positioned to provide the physical points-of-presence
needed to support e-commerce," said James Amos, president and chief executive officer
of MBE. "We are eBay's exclusive retail shipping solution and are approached frequently
by other online businesses looking to develop successful partnerships with us. There has
never been a more promising time in the 20-year history of MBE."
MBE has system-wide sales of approximately $1.5 billion and well over 100 million customer
transactions annually, providing potential partners with scale and an established brand
name that lend credibility and instant reach to e-commerce affiliates. Moreover,
in addition to its US locations, MBE operates more than 700 service centers abroad and
has master franchisees in 67 countries, giving the company a large international platform
from which to grow.
As e-commerce has exploded, meeting the fulfillment challenge has become a key
differentiating factor for online businesses. With a network more than twice the size of
its five nearest competitors combined, MBE can offer online vendors an all-important edge
in fulfillment by providing customers with convenient package pick-up locations and
assistance with merchandise returns.
"Returns are the 'Achilles heel' of e-commerce," said Mr. Amos.
"It's a frustrating process for consumers and merchants alike. MBE can facilitate
returns for both sides of the equation, making it a win-win situation."
MBE also has been moving forward to add value for its core customer base of
small-office/home-office ("SOHO") workers and "road warriors" –
workers who spend much of their time traveling. "Not only are these consumers relatively
affluent," noted Mr. Amos, "but they also consume large amounts of business
services and products, making them a very attractive target market. We conduct business
with them every day and they trust us to come up with solutions that make their lives easier."
MBE's valuable small business customer base, its service-oriented franchisees, and its ability
to address e-commerce fulfillment issues have attracted the attention of dozens of
Internet-based firms. This has provided MBE with an opportunity to invest in early-stage
ventures and partner with leading Internet companies, such as Stamps.com™ (Nasdaq: STMP).
Using the Stamps.com Internet mailing and shipping service, MBE will enable customers to
select the best carrier, price, and delivery terms to send packages and parcels. In addition,
MBE has invested in and/or initiated strategic alliances with several other online
business partners, including: Digitalwork.com, PeopleFirst.com, and Encryptix,
Inc.
About Mail Boxes Etc.:
This year marks the twentieth anniversary of Mail Boxes Etc. ("MBE"), the largest
retail business, communication and postal services franchisor in the world. MBE is a
wholly owned subsidiary of US Office Products Company, with more than 4,100 MBE locations
operating worldwide, and master license agreements in 67 countries around the world. In the
United States, MBE centers are owned and operated by licensed franchisees of Mail Boxes Etc.,
USA, Inc. Outside of the United States, MBE centers are owned and operated by MBE master
licensees or their franchisees. MBE maintains a web site at www.mbe.com.
This press release includes "forward-looking statements," within the meaning of
the federal securities laws, that involve uncertainties and risks. These include statements
regarding events or developments that the Company expects or anticipates will occur in
the future, such as statements about expectations for MBE's future business activities or
potential strategic transactions involving MBE. A number of risks and uncertainties could
cause actual results, events, and developments to differ from expectations. These include
MBE's ability to exploit the roll-out of significant new technology initiatives
successfully and on a timely basis, the impact of Internet-based competition on MBE's
business and e-commerce opportunities, and the possibility that MBE will be unable to
complete one or more strategic transactions on a timely basis or on favorable terms.
Please refer to US Office Products' 1999 Annual Report on Form 10-K and its other filings
with the SEC for a complete discussion of these and other important factors that could
cause actual results to differ materially from those projected by these forward-looking
statements. |
