Search form

Avid Technology to Acquire Pinnacle Systems

Avid Technology Inc. has entered into a definitive agreement to acquire Pinnacle Systems Inc. in a cash and stock transaction of about $462 million. The combination will provide Avid with immediate presence in consumer video and expand its professional broadcast offerings. 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.

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. In addition, Pinnacle's consumer video business will form the basis for a new consumer video division at Avid, providing the company with an immediate avenue into that segment.

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. 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.

"We see this acquisition as the next logical step in our long-term strategy, said Avid president/ceo David Krall. 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."

Pinnacle chairman/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. "

Both companies boards of directors 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.

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. 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 website maintained by the SEC at www.sec.gov.

Avid Technology (www.avid.com), headquartered in Tewksbury, Massachusetts, is a 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.

Pinnacle Systems (www.pinnaclesys.com), headquartered in Mountain View, California, provides broadcasters and consumers with cutting-edge digital media creation, storage and playback 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.

Tags 
randomness