PINNACLE SYSTEMS To Acquire Truevision, inc.
MOUNTAIN VIEW, Calif., December 16, 1998-Pinnacle Systems, Inc. (NASDAQ:PCLE) today announced that it has entered into a definitive agreement to acquire Truevision, Inc. (NASDAQ: TRUV) , a supplier of digital video products, in a transaction designed to extend Pinnacle Systems' leadership in the desktop digital video capture and editing market.
Under the terms of the agreement, Truevision shareholders will receive 0.0313 shares of Pinnacle Common stock for each share of Truevision common stock. The transaction is expected to close during the first calendar quarter of 1999, subject to various conditions including customary closing conditions including receipt of required regulatory approvals and approval by the shareholders of Truevision. Pinnacle Systems expects to issues approximately 400,000 new shares of Pinnacle common stock and to assume outstanding Truevision stock options and warrants. Based on yesterday's closing price of Pinnacle Systems stock, the consideration paid plus estimated transaction costs is approximately $14.5 million. The transaction will be accounted for as a purchase and will be taxable to the stockholders of Truevision. During the quarter in which the transaction closes, the Company expects to take an in-process research and development charge and to incur certain non-recurring expenses related to integrating the two businesses.
“We are very excited about merging these two companies,” said Mark Sanders, president and chief executive officer of Pinnacle Systems. “We believe this transaction will strengthen Pinnacle's position as the leading supplier of digital video capture and editing products. Truevision's product lines complement Pinnacle's well, and together we will serve a far wider array of customers and applications in the digital video editing market. Importantly, Truevision enjoys strategic relationships with a number of key industry partners, which is also complementary. In addition, we believe there are potential efficiencies to be gained, particularly in the areas of distribution and manufacturing.”
“Most important, Truevision has invested heavily in its next generation architecture for video editing, particularly in new custom chip technology that is scaleable for high definition television (HDTV) applications. We believe that combining this technology with parallel chip developments underway at Pinnacle will afford Pinnacle competitive advantages in next-generation capture card and video editing platforms,” Sanders continued.
At the completion of the transaction, the Company expects to maintain Truevision's engineering and customer support operation in Indianapolis, Indiana and to merge Truevision's Santa Clara engineering, sales and logistics operations into Pinnacle Systems' Mountain View, California headquarters. Sanders added, “by combining the two California facilities into Pinnacle's Mountain View location, we have the potential to recognize significant operational cost savings.”
About Pinnacle Systems, Inc.
Pinnacle Systems' broadcast, desktop, and consumer products provide video professionals and consumers the sophisticated tools needed to create dazzling video programs faster and more affordably than ever before. Pinnacle Systems may be reached at (650) 526-1600 or on the World Wide Web at www.pinnaclesys.com <http://www.pinnaclesys.com/>
About Truevision, Inc.
Truevision is a leader in desktop video for business and offers a full range of videographics products for personal computers, including Microsoft Windows platforms and ApplePower Macintosh.
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Certain of the statements in this press release, including the statements relating to each Company's expectations are forward-looking statements that are subject to risks and uncertainties that could cause results to be materially different than expectations. Such risks and uncertainties include, but are not limited to, risks associated with acquisition transactions and the related integration of operations. Investors are advised to read each Company's annual and quarterly reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission for a fuller discussion of such risks and uncertainties.
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