Megacorp sees potential in innovative software 07/05/03
Press Release follows Sony Pictures Digital has struck an agreement to purchase all of Sonic Foundry's desktop software products and related assets for $18 million cash and assumption of certain trade payables, accrued liabilities and capital leases associated with the desktop software business.
The acquisition of Sonic Foundry's desktop software follows the recent retail release of Sony Pictures Digital's Screenblast® Movie Studio™ and Screenblast® Music Studio™ video and music-mixing applications created in conjunction with Sonic Foundry's award-winning software team.
Sale of the desktop software assets includes Sonic Foundry's popular, industry-leading ACID®, Sound Forge® and Vegas® series of software products, as well as other related assets. Sony anticipates maintaining the group's Madison, Wis. base. The Board of Directors of Sonic Foundry has approved the transaction and certain shareholders have agreed to vote their shares in favor of the sale. Approval of the agreement may be subject to Sonic Foundry shareholder approval and other various conditions (see details below).
"During the past three years, we have come to recognize and admire Sonic Foundry's engineering expertise and value their software applications. We are excited to integrate this world-class team and their products into our ongoing efforts to produce and deliver the next generation of consumer entertainment services," said Patrick Kennedy, executive vice president of Sony Pictures Digital.
"The sale of our music and video digital software products is a key milestone in Sonic Foundry's history," said Rimas Buinevicius, chairman and CEO of Sonic Foundry.
"We couldn't pick a better partner than Sony Pictures Digital to carry on the same passion and success we've achieved over the past 12 years," he said. "Consummation of this agreement will give us the cash we need to pay our debt and allow us to focus our attention on writing the next successful chapter of Sonic Foundry's story - rich media - and building upon the early success we've already achieved with our Web presentation solution, Media Site Live™."
Sony Pictures Digital oversees the digital production and online assets of Sony Pictures Entertainment and leads its efforts to develop and provide new forms of online content, games, interactive programming, open-access video-on-demand and wireless entertainment. Screenblast, which first debuted in September 2001, gives the consumer the ability to create, enhance and share their digital videos, music and photos with a combination of a powerful software suite and an easy-to-use online service for sharing and personalizing consumers' media. Screenblast Movie Studio and Screenblast Music Studio software have been available through retail outlets since October 2002.
Sonic Foundry will file a proxy statement shortly with the SEC and mail to investors of record as of April 25 detailing the proposed transaction up for possible approval at its June meeting in Madison, Wis. The company expects to close the transaction within a few days following the shareholder meeting.
The signed agreement marks a major milestone in Sonic Foundry's longer-term strategy to concentrate on markets where rich media solutions are being embraced. The company will use the proceeds to pay off debt and fund its operations for its Web-based rich media communications product, MediaSite Live and related offerings.