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Ventro Corp. (Nasdaq: VNTR) rose 11/32 to 2 7/32 Wednesday after announcing a restructuring that includes the shuttering of its Chemix and Promedix online marketplace divisions.
The Mountain View, California-based operator of business-to-business (B2B) marketplaces had been seeking buyers for Chemdex, a life sciences exchange, and Promedix, a specialty medical products marketplace. After assessing various proposals, however, directors decided it would be in the shareholders' best interests to close the divisions "in an orderly manner," Ventro said.
Instead of relying on B2B marketplaces, the company said it now plans to concentrate on partnership opportunities.
Chemdex and Promedix will begin laying off workers at the end of this year, with the job cuts to be completed by March 31, 2001. In all, some 235 jobs at the two divisions and at Ventro will be cut.
As a result of the restructuring, Ventro expects charges of US$380 million to $410 million to year-end results. The charges will cover the job cuts, asset write downs, contract-cancellation charges and other expenses associated with the move. The company expects the restructuring to cut its cash requirements for operating activities by 50 percent.
"As Ventro moves forward, we will continue to provide technology and services to marketplaces in partnership with leading industrial players, as we have done with our MarketMile, Broadlane, Industria and Amphire joint ventures," said president and chief executive officer David Perry.
Perry added that Ventro believes it will be "most successful focusing on the
marketplace service provider model in partnership with brick-and-mortar
companies."
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