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23/03/2005

Avid Technology acquires Pinnacle Systems in cash and stock deal

Avid Technology has announced the acquisition of Pinnacle Systems for an estimated $482 million.
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.
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 March 18 2005.
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.”
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, which is subject to conditions, including shareholder and regulatory approvals, is expected to be completed in the second or third quarter of 2005.
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.
(CD/SP)
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