NOVATO, Calif. and SAN DIEGO, June
2 /PRNewswire-FirstCall/ -- 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.
- 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/.
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 the most recent annual reports on Form 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 of Sonic Solutions or 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.
SOURCE Sonic Solutions