Perot Systems Corp. beat out International Business Machines Corp. and other bidders to acquire the engineering team of Nets Inc. for $9 million.
Nets, an electronic commerce company run by former Lotus Development Corp. chief executive officer James Manzi, filed for Chapter 11 bankruptcy protection May 9.
Nets' chief technology officer Mark Teflian and his team had been developing a business-to-business electronic commerce framework that Perot was interested in launching. Dallas-based Perot made the acquisition within a week of the bankruptcy filing.
"We were racing against the clock," said Tara Sexton, a spokeswoman for Perot. "Others were interested, but our intention was to get the people as we needed their skills."
Also in the hunt were BBN Corp. of Cambridge, Mass., and Trilogy Development Group, Austin, Tex.
Mr. Teflian was formerly president of Covia Technologies, Rosemont, Ill., where he spearheaded the design of the United Airlines reservation system. Mr. Teflian will now report to Susan Fairty, Perot's chief technology officer, who in turn reports to James Cannavino, president and CEO.
The deal will allow Nets to pay off most of its creditors, including Manzi, who put a significant amount of his own money into the venture.
Nets' 40 engineers in Cambridge, Mass., and 20 in Pittsburgh will move into new offices in Cambridge, where Perot's Internet consulting practice is based.
"The addition of people will accelerate our expansion plans in Cambridge," said Ms. Sexton.
Perot has 5,000 employees in 53 locations in the United States and abroad. Last year it recorded $600 million of revenue.
"It will operate as a separate profit center and remain intact as an engineering team," she said. "We're not interested in a Perot-branded product, but we will use the Internet technology for the benefit of our clients. It was very appropriate for us to acquire the intellectual property and assets from Nets Inc.," she said.
Mr. Teflian and his "merry band" were doing "next-generation stuff," said Bill Doyle, a senior analyst at Forrester Research in Cambridge. "The next generation commerce platform could not be built" on Nets' industry.net platform, said Mr. Doyle.
About 300,000 engineers and purchasing agents had signed up for industry.net, an on-line shopping mall where companies could buy parts and supplies from about 4,500 providers. Vendors paid $6,000 to $20,000 a year to set up on the network. Industry.net started to falter as vendors increasingly built their own Web sites and sold goods directly.
"Perot Systems gets a crown jewel, without the albatross of operating an outdated electronic mall that was going to be phased out anyway," said Mr. Doyle. "Perot inherits good thinking and development talent, which is awfully hard to find."
