Wow...about time...now for Apple to buy them out too
Adobe > *
Adobe to buy Macromedia for $3.4B
Graphic software developer to pay 25% premium in bid to expand audio and video applications.
ANEW YORK (Reuters) - Computer document company Adobe Systems Inc. said Monday it agreed to buy multimedia software firm Macromedia Inc. for about $3.4 billion in stock, in a move designed to extend its lead in the market for creating and distributing digital documents.
Adobe (Research), best known for its Acrobat Web document-sharing software, said the deal would help it meet rising customer demand for wider-ranging applications with audio and video options, which are compatible with hand-held devices.
Macromedia (Research) gives Adobe access to the dominant animated graphics software on the Internet, which is also aggressively expanding into mobile phones.
The deal, set to close in the autumn, would likely yield cost savings, said Adobe's Chief Executive Bruce Chizen, without giving further details.
Adobe said it was unable to provide any estimates on future earnings under generally accepted accounting principles due to uncertainty over restructuring costs related to the deal, but said it would be break-even to slightly accretive to earnings in the first 12 months on a non-GAAP basis.
Under the terms of the deal, Macromedia shareholders will get 0.69 shares of Adobe, worth $41.86 at Adobe's closing price of $60.66 on Friday on Nasdaq, for each Macromedia share. That is a 25 percent premium to Macromedia's closing price of $33.45 on Friday, also on Nasdaq.
Chizen will stay in his position as CEO, Adobe said, while Macromedia President and Chief Executive Stephen Elop will become president of worldwide field operations at the combined company.
At the same time, Adobe said second-quarter earnings and revenue would be toward the high end of previous guidance due to strong demand for Acrobat -- more or less in line with analysts' estimates.
In March, the company said it expected earnings per share between 51 cents and 55 cents and revenue of between $475 million to $495 million. Wall Street is expecting earnings of 54 cents per share, on average, according to Reuters Estimates, and revenue of $489.8 million.
Separately, Macromedia said it expected net revenue for the fourth fiscal quarter, ended March 31, to exceed the $108 to $113 million guidance it provided in January. Analysts are expecting revenue of about $111 million.
Adobe also announced a $1 billion stock repurchase programme to start after the Macromedia deal has been completed.
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