07.29.2005 12:00 AM
Avid, Pinnacle Acquisition OK'd
acquisition of Pinnacle Systems was approved this week by both company's shareholders, days after Pinnacle rejected an eleventh hour offer by San Francisco-based private investor, Vector Capital.
In March, Avid agreed to purchase the video editing technology manufacturer in a deal valued at $462 million. Since then, Avid's stock has fallen from $59 per share to $41, reducing the transaction to approximately $328 million. Pinnacle shareholders will receive .0869 shares of Avid stock and $1.00 in cash for each Pinnacle share.
At closing, Avid is expected to pay $6.2 million in shares and $71 million cash. The deal still must be approved by European regulators. Earlier, the Pinnacle board rejected a $200 million offer for its consumer video editing division from Vector, citing too many uncertainties.
Prior to the vote, Avid announced its second quarter fiscal results that showed a slowdown in sales. For the three months that ended June 30, 2005, Avid reported a 14 percent increase in revenues of $160.1 million, up from $139.9 million during the same period last year. However, quarterly income declined to $13.6 million, or 37 cents per share, from $15.5 million, or 45 cents per share a year ago.
Avid CEO David Krall attributed the quarter's results to delays in the rollout of new products in its core broadcast markets and the negative effects of foreign currency movements.
Revenues for the six months that ended June 30, were $326.1 million compared to $267.3 million for last year during the same time.