 Avid Technology, Inc. to Acquire Pinnacle Systems, Inc.
Let the fun begin ........................... Quote:
Avid Technology, Inc. to Acquire Pinnacle Systems, Inc.
Combination to provide Avid with immediate presence in consumer video
and expand professional broadcast offerings
Tewksbury, MA – March 21, 2005
Avid Technology, Inc. (NASDAQ: AVID) and Pinnacle Systems, Inc.
(NASDAQ: PCLE) today announced that Avid has entered into a definitive
agreement to acquire Pinnacle in a cash and stock transaction.
Under the terms of the agreement, Pinnacle shareholders will receive
..0869 shares of Avid stock and $1.00 in cash for each Pinnacle share.
At closing, it is expected that Avid will issue approximately 6.2
million shares and pay $71.3 million in cash, for a total estimated
value of $462 million based on Avid’s stock price of $62.95 at market
close on Friday, March 18, 2005.
Upon completion of the transaction, the 6.2 million shares to be
issued to Pinnacle’s former shareholders will represent approximately
15% of Avid’s outstanding common stock. The acquisition is subject to
satisfying a number of closing conditions, including shareholder and
regulatory approvals, and is expected to close in the second or third
quarter of 2005.
The purchase price represents a 30% premium over Pinnacle’s closing
stock price of $4.97 on March 18, 2005. Assuming a closing date of
July 1, 2005, Avid expects the transaction, excluding
acquisition-related charges, to be dilutive to its pro-forma earnings
per share in the third quarter and accretive in the fourth quarter,
resulting in full-year 2005 pro forma earnings per share of
approximately $2.70 per diluted share.
In 2006, Avid expects the transaction to be approximately 10 cents
accretive, resulting in pro forma earnings per share of approximately
$3.20 per diluted share. After payment of the cash portion of the
purchase price, Avid expects its cash position to be $280-$300 million
at the end of 2005.
Following the closing, the parties expect that Pinnacle’s
award-winning professional products – such as the MediaStream
broadcast playout server and the Deko on-air graphics system – will
enhance Avid’s end-to-end broadcast production pipeline, which has
helped Avid become a global leader in that industry.
In addition, Pinnacle’s consumer video business – which to date has
shipped more than 10 million units - will form the basis for a new
consumer video division at Avid, providing the company with an
immediate avenue into that segment.
Avid president and CEO David Krall said, “We see this acquisition as
the next logical step in our long-term strategy. Just as our
acquisition of M-Audio in 2004 brought us into the consumer audio
business, by acquiring Pinnacle’s consumer video business, Avid will
be able to tap into the next generation of video editors while they
are still learning their craft.
"This creates a very large potential customer base for Avid’s future.
At the same time, we believe that Pinnacle’s professional broadcast
offerings will fit seamlessly with Avid’s business, extending our
end-to-end broadcast solutions with servers and on-air graphics
products. We think it would be hard to find a more complementary match
for these two businesses than what this combination provides.”
Krall added: “As a result of this transaction, we expect to derive
savings from a number of sources, including reducing public company
expenses, combining infrastructure functions where appropriate, and
providing our global sales teams with a broader portfolio of product
offerings.
"Over the past five years, Avid has increased its profitability and
shareholder value by growing our top line, expanding our gross
margins, and leveraging our talent and technology across the entire
company. By working with the dedicated team at Pinnacle, we’re
confident that, together, we can succeed with this same strategy
following the completion of the transaction.”
Pinnacle chairman and CEO Patti Hart said, “We believe that this
transaction creates significant value for our shareholders and
provides excellent opportunities for continued growth for the combined
company.
"Avid has built a strong, well-deserved reputation for efficient
business management while continuing to live up to its tradition of
technological innovation in the video and audio industries.
"By bringing our own award-winning products to the table – including
Pinnacle Studio, Pinnacle Liquid Edition, and our broad array of
broadcast systems – we’re confident that Pinnacle will strengthen and
diversify Avid’s business.
"Our customers can also anticipate a richer set of offerings within an
organization that will be even better positioned moving ahead. We see
this as the right move for Pinnacle, and we look forward to joining
the Avid family. ”
The Boards of Directors of both Avid and Pinnacle have approved the
definitive agreement. Avid will seek stockholder approval of the
transaction at its annual meeting, and Pinnacle will hold a special
meeting of shareholders to consider approval of the transaction.
The dates of the shareholder meetings will be announced following
completion of initial regulatory filings.
Conference Call
Avid and Pinnacle will hold a joint conference call and simultaneous
webcast to discuss the transaction, including the estimated impact on
Avid’s future results. The joint conference call will take place on
March 21 at 8:30 a.m., EST, and will be open to the public.
The conference call can be accessed from any U.S. or international
location by dialing (913) 981-5558 and referencing confirmation code
7229543. The call and subsequent replay will also be available on the
Avid and Pinnacle Web sites.
To listen to the call or replay on Avid’s Web site, go to the
Investors page under the Company menu at www.avid.com for complete
details 10-15 minutes prior to the start of the conference call. To
listen to the call or replay on Pinnacle’s Web site, go to the
Investor Relations page under the About Us menu at
www.pinnaclesys.com.
IMPORTANT ADDITIONAL INFORMATION WILL BE FILED WITH THE SEC
Avid plans to file with the SEC a Registration Statement on Form S-4
in connection with the transaction and Avid and Pinnacle plan to file
with the SEC and mail to their respective stockholders a Joint Proxy
Statement/Prospectus in connection with the transaction.
The Registration Statement and the Joint Proxy Statement/Prospectus
will contain important information about Avid, Pinnacle, the
transaction and related matters. Investors and security holders are
urged to read the Registration Statement and the Joint Proxy
Statement/Prospectus carefully when they are available.
Investors and security holders will be able to obtain free copies of
the Registration Statement and the Joint Proxy Statement/Prospectus
(when available) and other documents filed with the SEC by Avid and
Pinnacle through the web site maintained by the SEC at www.sec.gov.
In addition, investors and security holders will be able to obtain
free copies of the Registration Statement and the Joint Proxy
Statement/Prospectus (when available) and other documents filed with
the SEC from Avid by contacting Dean Ridlon, Investor Relations
Director for Avid at telephone number 978.640.5309, or from Pinnacle
by contacting Deborah B. Demer of Demer IR Counsel, Inc. at telephone
number 925.938.2678, extension 224.
Avid and Pinnacle, and their respective directors and executive
officers, may be deemed to be participants in the solicitation of
proxies in respect of the transactions contemplated by the merger
agreement.
Information regarding Avid’s directors and executive officers is
contained in Avid’s Form 10-K for the year ended December 31, 2004 and
its proxy statement dated April 16, 2004, which are filed with the SEC
and available free of charge as indicated above.
Information regarding Pinnacle’s directors and executive officers is
contained in Pinnacle’s Form 10-K for the year ended June 30, 2004 and
its proxy statement dated September 30, 2004, which are filed with the
SEC and available free of charge as indicated above.
The interests of Avid’s and Pinnacle’s respective directors and
executive officers in the solicitations with respect to the
transactions in particular will be more specifically set forth in the
Registration Statement and the Joint Proxy Statement/Prospectus filed
with the SEC, which will be available free of charge as indicated
above.
About Avid Technology, Inc.
Avid Technology, Inc. is the world leader in digital nonlinear media
creation, management and distribution solutions, enabling film, video,
audio, animation, games and broadcast professionals to work more
efficiently, productively and creatively. For more information about
the company’s Oscar, Grammy, and Emmy award-winning products and
services, please visit: www.avid.com.
© 2005 Avid Technology, Inc. All rights reserved. Product features,
specifications, system requirement and availability are subject to
change without notice. Avid, Digidesign, Film Composer, Media Composer
and Pro Tools are either registered trademarks or trademarks of Avid
Technology, Inc. in the United States and/or other countries. iNEWS is
a trademark of iNews, LLC. Avid received an Oscar statuette
representing the 1998 Scientific and Technical Award for the concept,
design, and engineering of the Avid Film Composer® system for motion
picture editing. Digidesign, Avid’s audio division, received an Oscar
statuette representing the 2003 Scientific and Technical Award for the
design, development, and implementation of its Pro Tools® digital
audio workstation. Oscar is a trademark and service mark of the
Academy of Motion Picture Arts and Sciences. Emmy is a registered
trademark of ATAS/NATAS. Grammy is a trademark of the National Academy
of Recording Arts and Sciences, Inc. All other trademarks contained
herein are the property of their respective owners.
About Pinnacle Systems, Inc.
Pinnacle Systems provides broadcasters and consumers with cutting-edge
digital media creation, storage, and play-back solutions for use at
Home, in the Studio and on the Air. Pinnacle Systems’ award winning
digital media solutions are in use around the world for broadcast,
video and audio editing, DVD and CDR authoring and on the Internet.
A recognized industry leader, Pinnacle Systems has received nine
prestigious Emmy Awards for its technical innovations and carries this
commitment throughout all of its product lines.
For more information about Pinnacle Systems products and services,
please visit: www.pinnaclesys.com. Pinnacle Systems, MediaStream,
Deko, Pinnacle Studio, and Pinnacle Liquid Edition are trademarks or
registered trademarks of Pinnacle Systems, Inc. or its subsidiaries in
the United States and other countries.
© 2005 Avid Technology, Inc. All rights reserved. Avid, Digidesign,
Film Composer, and Pro Tools are either registered trademarks or
trademarks of Avid Technology, Inc. in the United States and/or other
countries.
Avid received an Oscar statuette representing the 1998 Scientific and
Technical Award for the concept, design, and engineering of the Avid
Film Composer system for motion picture editing.
Digidesign, Avid’s audio division, received an Oscar statuette
representing the 2003 Scientific and Technical Award for the design,
development, and implementation of its Pro Tools digital audio
workstation.
Oscar is a trademark and service mark of the Academy of Motion Picture
Arts and Sciences.
Emmy is a registered trademark of ATAS/NATAS. Grammy is a trademark of
the National Academy of Recording Arts and Sciences, Inc. All other
trademarks contained herein are the property of their respective
owners.
Some statements in this announcement may be “forward-looking
statements” for the purposes of the Private Securities Litigation
Reform Act of 1995.
These forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially from
those indicated in the forward-looking statements, including but not
limited to: (i) the possibility that the transaction will not close or
that the closing will be delayed due to antitrust regulatory review or
other factors, (ii) the challenges and costs of assimilating the
operations and personnel of Pinnacle; (iii) the ability to attract and
retain highly qualified employees; (iv) competitive factors, including
pricing pressures; (v) reaction of customers of Pinnacle and Avid and
related risks of maintaining pre-existing relationships of Pinnacle;
(vi) fluctuating currency exchange rates; (vii) adverse changes in
general economic or market conditions, particularly in the
content-creation industry; and (viii) other one-time events and other
important factors disclosed previously and from time to time in Avid’s
and Pinnacle’s filings with the SEC and to be more specifically set
forth in the Joint Proxy Statement/Prospectus to be filed by Avid and
Pinnacle with the SEC. Avid and Pinnacle disclaim any obligation to
update any forward-looking statements after the date of this release.
| Gary MacKenzie
Audio Visual Technician / Video Editor   |
March 22nd 05, 01:22 PM
posted to uk.rec.video.digital
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