Attached files
file | filename |
---|---|
8-K - SONIC SOLUTIONS/CA/ | v187114_8k.htm |
EX-10.2 - SONIC SOLUTIONS/CA/ | v187114_ex10-2.htm |
EX-1.1 - SONIC SOLUTIONS/CA/ | v187114_ex1-1.htm |
EX-10.1 - SONIC SOLUTIONS/CA/ | v187114_ex10-1.htm |
Exhibit
99.1
|
News
Release
Sonic
to Acquire DivX
Combination
Creates Digital Video Delivery Powerhouse;
Streamlines
“Over the Top” Distribution of Hollywood Movies
Novato and San Diego, CA (June 2,
2010) — Sonic Solutions® (NASDAQ:
SNIC) and DivX, Inc. (NASDAQ: DIVX) today jointly announced that they have
signed a definitive merger agreement for Sonic Solutions to acquire DivX, Inc.,
a leading digital media company, based in San Diego,
California. Under the terms of the agreement, approved by the boards
of directors of both companies, Sonic would acquire all the outstanding shares
of DivX and merge DivX operations into those of Sonic. DivX stockholders would
receive a combination of cash and stock equal to $3.75 in cash and 0.514 shares
of Sonic common stock for each share of DivX they hold. The acquisition, which
is expected to close in September 2010, is subject to approval of the
shareholders of both companies as well as applicable regulatory approvals and
customary closing conditions.
For more
than 20 years, Sonic has been the leader in developing technologies for the
preparation and delivery of entertainment content in popular formats — CD, DVD,
Blu-ray Disc and most recently Internet delivery of video. The
acquisition of DivX is expected to advance Sonic’s mission to deliver technology
that makes it easy and convenient for retailers, online services, Hollywood
studios, and manufacturers of CE and mobile devices to distribute premium
digital video content over the Internet. DivX is expected to enable
Sonic to deepen and broaden the technology it offers for Internet-based video
delivery and expand its relationships with leading retailers and consumer
electronics manufacturers.
DivX is a leading digital media company
that enables consumers to enjoy a high-quality video experience across any kind
of device. The DivX brand is recognized worldwide and supported by a community
of millions of consumers. DivX technology — encoders for formatting
video, decoders for playback, and digital rights management (DRM) for content
protection — resides on over 300 million devices shipped into the global market
from all major CE manufacturers including over 8,500 models of digital
televisions, DVD and Blu-ray Disc players, and over 80 different mobile
handsets. In addition, the DivX web properties enjoy more than 12
million unique visits each month.
Sonic
believes that the acquisition of DivX will provide a number of key
benefits:
|
·
|
The
acquisition is expected to be accretive to Sonic’s shareholders,
potentially doubling fiscal year 2012 earnings per share on a non-GAAP
basis.
|
|
·
|
The
DivX technologies are expected to give Sonic a more extensive solution for
Internet video delivery including the dominant tools for content
preparation in “the cloud,” video playback, and Hollywood-approved
DRM.
|
Sonic
to Acquire DivX
|
2
|
|
·
|
DivX
is expected to provide leverage to Sonic’s strategy of consumer
electronics deployment – the DivX player and DRM is deployed in products
from more than 150 different CE manufacturers worldwide on millions of
devices.
|
·
|
The
DivX brand is known worldwide as an indicator of compatibility, quality,
and ease of use.
|
Overall,
the combination of DivX technology, capabilities, and market position is
expected to advance Sonic’s mission: to make publishing, delivery, and enjoyment
of movies over the Internet as easy and widespread as DVD delivery is
today.
“Our
studio, storefront, and consumer electronics partners agree: they want a clear
and efficient path to deliver premium content to their customers,” said Dave
Habiger, president and CEO of Sonic Solutions. “The combination of
Sonic and DivX promises to be the foremost provider of platforms, tools, and
technologies for the efficient delivery of premium video entertainment to
virtually any type of consumer electronics device. We expect DivX’s
deep technology and broad deployment in the CE and mobile areas to give us
significant leverage as we expand and enhance our RoxioNow premium entertainment
platform.”
“Sonic
and DivX are both market leaders in digital media and share similar visions
about a better media future for consumers,” stated Kevin Hell, CEO of
DivX. “We also share similar cultures and both recognize the
tremendous market opportunity that lies ahead for Internet video services. By
combining our products, technologies, partnerships, and talented employees, we
immediately create a complete end-to-end delivery platform for digital media,
with expanded reach and capacity, at a perfect time to capitalize on the
market’s rapid development. With the acquisition of DivX, Sonic should be
extremely well positioned to serve existing customers, attract new partners, and
increase our market presence and potential.”
The
current Sonic management team (including Dave Habiger, Clay Leighton, Paul
Norris, Mark Ely, and Matt DiMaria) will lead the combined company, augmented
with key managers and executives from DivX. Kevin Hell, DivX’s chief
executive officer, Dan Halvorson, DivX’s chief financial officer and executive
vice president, operations, and David Richter, DivX’s executive vice president,
business & legal affairs and general counsel, will be cooperating closely
with the Sonic team to close the transaction and integrate the companies, but
will not continue in the combined company in their current positions. Following
completion of the merger, DivX stockholders will own approximately 35% of the
combined company’s capital stock. Sonic expects to add two members of
the DivX board of directors, to be named later, to its board at the closing of
the transaction.
Oppenheimer
& Co. is acting as DivX’s exclusive financial advisor in the
transaction.
Sonic
Earnings Preview and Announcement
As
previously announced, Sonic plans to release its financial results for the
fourth fiscal quarter and full year (ending March 31, 2010) on Thursday, June
3. In order to facilitate discussion with investors on the impact of
the DivX merger, Sonic is announcing today the following key points from its
upcoming earnings announcement:
For the
fourth quarter ended March 31, 2010, Sonic recorded $26.4 million in revenue,
$1.2 million in net income or $0.04 per fully diluted share on a GAAP
basis. Sonic expects that, for the first quarter of the 2011 fiscal
year (the quarter ending June 30, 2010), it will generate approximately $25.0
million in revenue.
Shareholders
and investors interested in more detail are encouraged to review the
announcement Sonic will make tomorrow, as well as Sonic’s Annual Report on Form
10-K, which it plans to file shortly. In light of today’s
announcement, Sonic will not be hosting its previously scheduled earnings
conference call on June 3, and instead encourages participation in the following
joint conference call.
Conference
Call Regarding DivX Acquisition
Members
of the Sonic and DivX management teams will lead a conference call to discuss
details of the acquisition on Wednesday, June 2, 2010 at 5:30 am PDT (8:30 am
EDT). Investors are invited to listen by dialing (877) 293-5493
(domestic) or (707) 287-9350 (international) or via webcast on the investor
sections of the Sonic Web site at www.sonic.com/about/investor/
and the DivX Web site at http://investors.divx.com/. A
telephone replay will also be available shortly following the call on Wednesday,
June 2, 2010 through midnight (PT) on Wednesday, June 9, 2010. The replay will
be available by dialing (800) 642-1687 (domestic) or (706) 645-9291
(international) and referencing the conference ID number 79492916. A
replay will also be available via Webcast at www.sonic.com/about/investor/ and
the DivX Web site at http://investors.divx.com/.
Sonic
to Acquire DivX
|
3
|
About
DivX
DivX,
Inc. is a leading digital media company that enables consumers to enjoy a
high-quality video experience across any kind of device. DivX
creates, distributes and licenses digital video technologies that span the
“three screens” comprising today’s consumer media environment—the PC, the
television and mobile devices. Over 300 million DivX devices have shipped into
the market from leading consumer electronics manufacturers. DivX also offers
content providers and publishers a complete solution for the distribution of
secure, high-quality digital video content. Driven by a globally recognized
brand and a passionate community of hundreds of millions of consumers, DivX is
simplifying the video experience to enable the digital home.
About
Sonic Solutions
Sonic
Solutions® (NASDAQ:
SNIC) is powering the digital media ecosystem through its complete range of
Hollywood to Home™
applications, services, and technologies. Sonic’s Roxio products
enable consumers to easily manage and enjoy personal media and premium Hollywood
entertainment on a broad range of connected devices. A wide array of
leading technology firms, professionals, businesses, and developers rely on
Sonic to bring innovative digital media functionality to next-generation devices
and platforms. Sonic Solutions is headquartered in Marin County,
California.
Forward
Looking Statements
This
release may contain forward looking statements that are based upon current
expectations, including the timing of the proposed merger, the expected effects
of the merger on the combined operations and financial results of Sonic
Solutions and DivX and other matters related to the proposed merger as well as
the launch, distribution, and market acceptance of their applications,
technologies and services. Actual results could differ materially
from those projected in the forward looking statements as a result of various
risks and uncertainties, including risks relating to completing the merger and
the timing of closing and risks relating to obtaining the expected benefits of
the merger, as well as those discussed in the annual and quarterly reports filed
by Sonic Solutions and DivX with the Securities and Exchange Commission (the
“SEC”). This press release should be read in conjunction with most recent annual
reports on Forms 10-K, Form 10-Q and other reports filed by Sonic Solutions and
DivX with the SEC, which contain more detailed discussion of the businesses and
risks of Sonic Solutions and DivX, including risks and uncertainties that may
affect future results. Neither Sonic Solutions nor DivX undertakes to
update any forward-looking statements as of Sonic Solutions and DivX, except as
required by law.
Sonic, the
Sonic logo, Sonic Solutions, Roxio, RoxioNow, and Hollywood to Home, are
trademarks or registered trademarks owned by Sonic Solutions in the United
States and/or other countries. DivX and the DivX logo are trademarks
or registered trademark owned by DivX, Inc. in the United States and/or other
countries. All other company or product names are trademarks of their respective
owners and, in some cases, are used by Sonic Solutions under
license.
Additional
Information
This press
release is not a solicitation of a proxy, an offer to purchase, nor a
solicitation of an offer to sell shares of Sonic Solutions, and it is not a
substitute for any proxy statement or other filings that may be made with the
“SEC with respect to the merger. When such documents are filed with the
SEC, investors will be urged to thoroughly review and consider them because they
will contain important information. Any such documents, once filed, will be
available free of charge at the SEC's website (www.sec.gov) and from Sonic
Solutions and its corporate website (www.sonic.com)
or from DivX and its corporate website (www.divx.com).
Sonic
Solutions, DivX and their respective directors, executive officers and other
members of their management may be deemed to be soliciting proxies from
shareholders of Sonic Solutions or DivX in favor of the
merger. Investors and stockholders may obtain more detailed
information regarding the direct and indirect interests in the merger of persons
who may, under the rules of the SEC, be considered participants in the
solicitation of these shareholders in connection with the merger by reading the
preliminary and definitive proxy statements regarding the merger, which will be
filed with the SEC. Information about the directors and executive officers of
Sonic Solutions may be found in its definitive proxy statement filed with the
SEC on October 1, 2009. Information about the directors and executive
officers of DivX may be found in its definitive proxy statement filed with the
SEC on April 20, 2010. These documents will be available free of charge once
available at the SEC's web site at www.sec.gov or by directing a request to
either Sonic Solutions or DivX.
Contact
Information:
Investor
Relations Contact(s)
Nils
Erdmann, Sonic Solutions, 415-893-8032, nils_erdmann@sonic.com
Karen A.
Fisher, DivX, 858-882-6415, kfisher@divxcorp.com
Press
Contact(s):
Chris
Taylor, Sonic Solutions, 408-367-5231, chris_taylor@sonic.com
Jen
Baumgartner, DivX, 503-901-5371, jbaumgartner@divxcorp.com,