Autodesk to Acquire Discreet Logic
PR Newswire - August 20, 1998 17:37
Companies Unite to Create Industry's Premier Line of Digital Content Creation Tools
SAN RAFAEL, Calif. and MONTREAL, Aug. 20 /PRNewswire/ -- Autodesk, Inc. (Nasdaq: ADSK) and Discreet Logic
(Nasdaq: DSLGF) today announced that they have entered into a definitive agreement providing for the acquisition of Discreet
Logic by Autodesk. The combination is intended to create the premier total solutions provider of digital content design, creation,
and manipulation tools for the creation of moving images. The transaction will combine the technological strength and quality brand
name of Discreet, a leading developer of design-driven, advanced systems and new media software for the creation of moving
pictures, with Autodesk's new media division, Kinetix, the leader in PC-based 3D content creation tools for professionals.
Together the companies have complementary best-of-class digital media product lines, development teams, channel and
distribution expertise. This will allow customers to realize significant productivity gains by having access to a single, integrated and
interoperable production pipeline from the creation of basic 2D and 3D designs to the development of complex editing and special
effects.
Under the terms of the agreement, Autodesk will issue 0.525 shares of common stock for each outstanding share of Discreet
Logic stock and is intended to be accounted for as a pooling of interests. Based on the August 19th closing price of Autodesk's
stock, the aggregate value of the transaction to Discreet Logic's shareholders is approximately $520 million. Subject to several
conditions, including regulatory approvals and approval of the shareholders of both companies, the transaction is expected to close
by the end of the year. Until this transaction is finalized, both companies shall operate as separate entities.
"With this acquisition, we are executing on our strategy to broaden our business and expand beyond the traditional design software
category," said Carol Bartz, Autodesk Chairman and CEO. "Our eyes are focused on our customers and our mission is to make
their jobs easier. This union will broaden our 3D product portfolio in the professional entertainment software arena with
world-class, high-end, and new media visual effects, editing and production software, Discreet's technical expertise, and brand
presence."
"With Kinetix we are pleased to form the cornerstone of Autodesk's entertainment product offering," said Richard Szalwinski,
Discreet's president. "We benefit through access to Autodesk's vast expertise in NT engineering and 3D technology, worldwide
distribution organization, financial resources, and experienced executive management team. Together, we can concentrate our
focus on developing best-of-class products and accelerating their penetration into the large and fast growing high-end and
mid-range professional entertainment markets. We believe this combination is key to achieve our goal of becoming the leading
provider of content creation tools."
Discreet recently reported record revenues of $152 million for its fiscal year ended June 30, 1998 while revenues from Kinetix
totaled $40 million for the same period. This market is comprised of turnkey systems and software tools for animation and
modeling, visual effects, and compositing, editing and production, used in the broadcast, films, gaming and web markets. Customers
will now have a single provider of software to develop images for the production pipeline, leading to greater productivity and
reduced cycle times.
Discreet's 350 employees and its product families will be integrated with Autodesk's Kinetix business unit and become Discreet, a
division of Autodesk. The combined entity will be headquartered in Montreal and managed by Richard Szalwinski, Discreet's
current president, reporting to Eric Herr, Autodesk President and Chief Operating Officer. In San Francisco, Kinetix' Vice
President Jim Guerard will join Discreet's senior management team and head up the New Media Group which will be comprised
of products from both Kinetix and Discreet.
Today's announcement follows a series of joint announcements by these two companies. On March 23rd, the eve of the 1998
National Association of Broadcasters convention, the companies announced a collaboration aimed at delivering two-way
integration between Discreet's New Media product line and 3D Studio MAX 2.5 from Kinetix. In July, the two companies also
announced the availability of new plug-ins from the web which enable increased interoperability. These solutions have been
demonstrated at two major industry trade events this year with support from a range of customers and partners.
Discreet's award-winning turnkey systems and new media software are widely used for visual effects and compositing, editing
and broadcast production in feature films, video, broadcast, HDTV, new media and the web. Discreet's advanced systems include
inferno* and flame* for real-time interactivity and strong creative toolsets for visual effects; fire* and smoke* for real-time, online,
nonlinear editing and finishing, including HD support; and frost* for 3D broadcast graphics. Its new media products include
effect*, paint*, and light* for visual effects, compositing and rotoscoping; and edit* for NT-based nonlinear editing on desktop
platforms. With Kinetix' 3D Studio MAX, Discreet's new media products form the cornerstone of a 2D-3D integrated digital
production environment.
As the leader in professional 3D solutions for the PC, Kinetix tools are widely popular with film and video producers,
video/computer game developers, Web content developers, architects, engineers, and designers. Kinetix's award-winning software
includes 3D Studio MAX(R), its flagship animation and modeling solution architected for the Windows NT platform, Character
Studio(R), the revolutionary, patented 3D character animation system incorporating breakthrough motion capture capabilities, and
3D Studio VIZ (TM), the ideal conceptual and presentation tool that compliments the Autodesk design product family.
Any forward looking statements in this release are necessarily subject to uncertainties based on various factors, including: whether
the closing conditions to the acquisition of Discreet will be satisfied and the acquisition consummated; the ability of Autodesk to
obtain pooling interests accounting treatment; the ability to successfully manage the integration of the two companies; business
conditions in the digital imagery markets worldwide; and product release cycles and competitive conditions. This agreement is
subject to the approval of shareholders and regulatory bodies.
Further information on potential factors which could affect the financial results of Autodesk and Discreet are included in
Autodesk's Report on Form 10-Q for its first fiscal quarter ended April 30th, 1998 and Discreet's quarterly Report of Form 10-Q
for its third fiscal quarter ended March 31st, 1998, each of which are on file with the Securities and Exchange Commission.
About Autodesk, Inc.
Autodesk is the world's leading supplier of PC design software. The company's 2D and 3D products are used in many industries,
including architectural and mechanical design, mapping, managing spatial data, film and video production, video game development
and Web content development. The fourth largest
PC software company in the world, Autodesk has over three million customers in more than 150 countries. For more information,
please sign onto its web page at www.autodesk.com. Autodesk shares are traded on the Nasdaq national market under the
symbol ADSK.
About Discreet
Discreet Logic, named as Canada's third fastest-growing company by PROFIT Magazine, develops advanced systems and new
media software used in the creation of digital imagery and serves three key markets: visual effects, editing and production.
Discreet products are used to develop imagery for video, broadcast, HDTV, the web, new media and feature films, including 1998
summer blockbuster "ARMAGEDDON," and Visual Effects Academy Award winners "Titanic" and "Independence Day." For
further information, visit Discreet's website at www.discreet.com or e-mail info@discreet.com.
NOTE: Disceet Logic, EDIT, EFFECT, Paint and Light are trademarks of Discreet Logic Inc. Autodesk, the Autodesk logo,
Kinetix, 3D Studio and 3D Studio Max are registered trademarks, and Character Studio, BIPED, and Physique are trademarks of
Autodesk, Inc. All other brand names, product names or trademarks are referenced solely for the purposes of identification and
belong to their respective holders.
SOURCE Autodesk, Inc.
/CONTACT: Christine Tsingos, Vice President and Treasurer, 415-507-6704,
or Rich Koch, Public Relations Manager, 415-507-6611, or
rich.koch@autodesk.com, both of Autodesk, Inc.; Emma Shield, PR Manager,
514-954-7151, or emmaS@discreet.com, or Leigh Pesqueira, Director, Corporate
Marketing, 514-954-7204, or leighP@discreet.com, both of Discreet Logic; or
Regina Muccillo, Marketing Director of Kinetix, 415-547-2257, or
regina.muccillo@ktx.com/
/Web site: discreet.com
/Web site: autodesk.com
(ADSK DSLGF)
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