Adobe to Acquire MacroMedia for $3.4 Billion in All Stock Deal

April 18, 2005
(CoolAvenues News Wire)

Adobe Systems, one of the largest document design Software Company, announced its decision to acquire Macromedia in an all-stock deal valued at approximately $3.4 billion. MacroMedia (Nasdaq: MACR).

MacroMedia, founded in year 1992, provides web-application software for web & application developers. Its key product "Flash" is installed on more than 98% of the desktops connected to the Internet and has more than half a billion flash players installed. In fiscal year 2004, Macromedia generated total sales of $422 million while Adobe Systems had clocked revenue of $1.67 billion in fiscal 2004.

As per the terms of agreement, which have been approved by board of directors of both companies, Macromedia stockholders will receive, at a fixed exchange ratio, 0.69 shares of Adobe common stock for every share of Macromedia common stock in a tax-free exchange. Based on Adobe's and Macromedia's closing prices on Friday, April 15, 2005, this represents a price of $41.86 per share of Macromedia common stock which is much higher than the Friday closing price of $33.45. After the completion of the deal, Macromedia stockholders will own approximately 18 percent of the combined company on a pro forma basis. On 15th April 2005, MacroMedia share closed at $33.45 down 5.11% while Adobe share was down by 4.44% to close at $60.66.

In the combined entity, Bruce Chizen will continue as chief executive officer, while Shantanu Narayen will remain president and chief operating officer. Stephen Elop, president and chief executive officer of Macromedia, will join Adobe as president of worldwide field operations. Murray Demo will remain executive vice president and chief financial officer. Dr. John Warnock and Dr. Charles Geschke will remain as co-chairmen of the Board of Directors of the combined company and Rob Burgess, chairman of the Macromedia Board of Directors, will join the Adobe Board.

The acquisition, which is expected to close in Fall 2005, is subject to approval by stockholders as well as regulators.

Concluded.

---