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Creative to Acquire ENSONIQ
SINGAPORE, Dec. 10 /PRNewswire/ -- Creative Technology Ltd. (Nasdaq:
CREAF), the world's leading provider of multimedia technology for the
personal computer, today announced that it will acquire ENSONIQ Corp. of
Malvern, Pennsylvania. ENSONIQ is a key innovator in the design and
development of PCI audio microchip technology and has strong brand
recognition associated with its line of electronic musical instruments. This
strategic acquisition will enable Creative to extend its reach in the PCI audio
segment of the PC OEM and PC motherboard markets. It also provides
Creative with other technologies that are highly complementary to Creative's
recently announced Environmental Audio(TM) technology and its future
Sound Blaster Live!(TM) product line.
In acquiring privately-held ENSONIQ, Creative will pay up to US$77 million in
cash which will be paid out of Creative's existing cash resources. The
acquisition, which was signed on Tuesday, December 9, 1997, will be
accounted for by Creative as a purchase. Creative anticipates a one-time
write-off relating to this transaction, the amount of which will be determined
based upon the value of in-process research and development. The closing of
the transaction is subject to the receipt of regulatory approval.
"This acquisition is a win for both companies and it's a major win for our
current and future customers!" said Sim Wong Hoo, chairman and chief
executive officer of Creative. "ENSONIQ sells to a number of OEM customers
including Hewlett-Packard and Gateway. ENSONIQ's success with its PCI
audio solutions fits perfectly with Creative's current and future product plans
in both the OEM and retail marketplaces. We are very excited about the
great people, products and technologies that ENSONIQ brings and the
opportunities this merger presents.
"In addition, we are pleased to gain ENSONIQ's musical instrument
business," said Sim. "ENSONIQ has long enjoyed a strong reputation as a
company that brings innovative ideas to music keyboards at great prices.
Their keyboards and digital audio editing systems will complement those of
E-mu Systems, our digital audio and musical instrument subsidiary, whose
reputation is based on studio quality sampling, professional electronic
musical instruments and other digital audio products. The resulting synergies
will be significant, providing the combined entity with substantial marketing
resources and engineering talent. All of this, we believe, will enhance our
presence and competitive position in the billion dollar electronic musical
instruments market," said Sim.
"We are extremely pleased to be joining forces with Creative," said Albert
Charpentier, president of ENSONIQ. "This merger allows us to continue our
focus on the OEM audio business -- an area where we have already made
major inroads, including the introduction of AudioPCI(TM) earlier this year.
Creative's vast resources and its global distribution network will allow us to
best leverage our technologies and expand our goals of providing high-quality
products and strong support to our customers at the most cost-competitive
price points."
Creative Technology Ltd. develops, manufactures and markets a wide array of
advanced multimedia solutions for the PC, entertainment, education, music
and productivity tools markets. Creative's products are marketed through both
the OEM and retail channels under a variety of trademarks, including the
"Blaster" family name. Sound Blaster(R) has become the multimedia
industry's de facto audio standard. Sound Blaster is an audio platform
consisting of a sound card or chipset, software drivers and bundled software
applications that enable PCs to produce high quality audio. Creative's
corporate headquarters and primary manufacturing are based in Singapore,
with sales, distribution and research and development being carried out
through an extensive, global network of subsidiaries located in North
America, Europe, Asia and Africa.
NOTE: All products mentioned herein are either registered trademarks or
trademarks of their respective owners and are hereby recognized as such.
Safe Harbor for Forward Looking Statements:
Except for the historical information contained herein, the matters set forth
herein (including information on future products, future marketing efforts, and
future revenues, margins, expenses and earnings) are forward looking
statements that are subject to certain risks and uncertainties that could
cause actual results to differ materially from those set forth in the forward
looking statements. Such risks and uncertainties include, among others:
potential fluctuations in quarterly results due to the seasonality of Creative's
business and the difficulty of projecting such fluctuations; reductions in the
market value of products sold by Creative, including increases in supply or
declines in demand or prices for CD-ROM or DVD drives, board and chip-level
products, and software products; the short product cycles that characterize
most of Creative's products; the increasing proliferation of sound functionality
in new products from new competitors and at the application software, chip
and operating system levels; Creative's reliance on sole sources for many of
its chips and other key components; the timely development, ramp, delivery
and market acceptance of new products, including Creative's next generation
sound chips, and its graphics accelerator, video conferencing, CD-ROM and
DVD drives, DVD encoder cards, communications and Internet-related
products; the availability of operating capital on acceptable terms; the
volatility of share prices for companies in Creative's industry and the effect of
those prices or other events beyond Creative's control; and other risk factors
described in Creative's filings with the Securities and Exchange Commission
over the past twelve months.
Copyright 1997, PR Newswire
CONTACT: Rick Myllenbeck of Creative Labs, Inc., 408-434-5700, or
rickm@soundblaster.com; or John Spataro of ENSONIQ Corp.,
610-647-3930, ext. 429, or johnsp@ensoniq.com
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