PxPixel
Avid Gets to Pinnacle - Broadcasting & Cable

Avid Gets to Pinnacle

Author:
Publish date:

The long-rumored sale of Pinnacle Systems Inc.’s broadcast division ballooned into a complete sale of the company Monday morning when Avid Technology Inc. agreed to acquire it in a cash and stock transition estimated at $462 million.

Under the terms of the agreement, Pinnacle shareholders will receive .0869 shares of Avid stock and $1.00 in cash for each Pinnacle share. At closing, 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 Friday, March 18, 2005.

The move fills in a critical missing component in Avid’s product portfolio: graphics and, in particular, character generator products. Pinnacle’s DekoCast lineup and its MediaStream broadcast playout server are both key reasons for the deal, as is Pinnacle’s consumer video business which is centered around low-cost desktop editing tools.

"We see this acquisition as the next logical step in our long-term strategy,” Avid President and CEO David Krall said. “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."

Related