http://news.com.com/Adobe+to+buy+Macromedi..._3-5674501.html

Computer document company Adobe Systems said on Monday it agreed to buy multimedia software firm Macromedia for about $3.4 billion in stock, a move designed to extend its lead in the market for creating and distributing digital documents.

Adobe, best known for its Acrobat document-sharing software, said the deal would help it meet rising customer demand for audio and video options that are compatible with hand-held devices.

Macromedia also gives Adobe access to the dominant animated graphics software on the Internet and which is also aggressively expanding into mobile phones.

The deal is the latest move in the long-anticipated consolidation of the software sector. It was initially welcomed by industry-watchers.

"Management is quite capable, but I think it is quite a big deal to be swallowing," said Robert Sellar, a technology fund manager at the UK's Aberdeen Asset Management, which owns Adobe shares. "$3.4 billion is a lot of money to be spending but (Adobe) are hugely cash generative."

The deal, set to close in the autumn, would likely yield cost savings, said Adobe 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 (GAAP) due to uncertainty over restructuring costs related to the deal, but it 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 share 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 CEO 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 and $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 program to start after the Macromedia deal has been completed.

Story Copyright © 2005 Reuters Limited. All rights reserved.

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The Adobe suite is going to go in some very interesting directions with Macromedia applications involved.

Hmmm... Flash integrated into imageready and photoshop would be sweet :okthumb:

More like flashcast and more ;)

I can see nothing but good things for developers, should make for some interesting times ahead :)

Given that macromedia is progressing with flashcast and flash lite for mobiles, with flash being a very suitable application to run with streaming tv and beyond, it does make sense. Adobe bought out Aldus years back who owned pagemaker and their only competitor was Quark at the time which as you may or not know is page layout for print. With Adobe having bought them out and having the pdf side of the print world, it makes sense for them to buy out macromedia and complete the cycle, publishing on mobiles starts :)

yes if this deal goes through i only hope they develop the merger of both platforms. that would rock.

Talk about forward thinking, does anyone else remember Adobe's roots were in nothing but fonts?! To be a simple font foundary and take things to where they are today is amazing for a company. You never hear of any of their font rivals from 30 years ago even existing in any way today. That's what I call adaptability. :okthumb:

yes if this deal goes through i only hope they develop the merger of both platforms. that would rock. [/b][/quote]
I'm thinking they would, Adobe seems to have a nack at just plain getting things right :)

I'm thinking they would, Adobe seems to have a nack at just plain getting things right :) [/b][/quote]
Yes and this is definately a big and interesting move.

Should be very interesting to see if and how they incorporate the two.

I'm really excited about this. I know that’s a little sad to admit but as some have pointed out it could bring whole new areas to take our products and in different ways. If not then at least we'll have new innovations and developments to explore.

:)

oh my god
i'm creaming my pants here

this has so much impact on my future direction

exciting as hell

Yeah - remember you had to install Adobe Type Manager in Windows 3.1 etc just to use their fonts? ;)

Obviously they have someone smart working there. They made Acrobat the de-facto standard for all forms and legal-type documents on the web - the US govt and almost all other beaurocracies welcomed it with open arms.

Now most product catalogs seem to be PDFs - imagine if you have Shockwave built into them etc...

Unlike many other takeovers in recent yeras I think this is a perfect merger...

What's left Corel and Quark?

Newton, it appears you were 100% on target with your prediction of Adobe and Macromedia going after the mobile markets.

http://www.theglobeandmail.com/servlet/Art...s/International

It is the future and 3g is just a short leap away .. http://www.3g.co.uk/3GWorld.htm makes sense for them to grab flashcast since mobile tv is being aired on Rogers in Canada, pt in luxembourg and more. Nick thinks its an obsession, and he may be right lol

that would be a good deal for all

Dude your site needs some work!

A.) No love for Oprano on your site!

B.) I'm running at 1024 x 768 and the quotes that scroll up just overlap at the top:http://www.clubta.com/webmasters/intro.swf

C.) I would do more but I'm so cunty right now I'd never stop!!!

Dude your site needs some work!

A.) No love for Oprano on your site!

B.) I'm running at 1024 x 768 and the quotes that scroll up just overlap at the top:http://www.clubta.com/webmasters/intro.swf

C.) I would do more but I'm so cunty right now I'd never stop!!! [/b][/quote]
You should have kept going! :angry:


The graphical errors alone are a reason to pursue this!

I use most of the Adobe products for video editing, DVD authoring and graphic design, so I think this is a smart move. I already have several Macromedia software including the Flash app and Dreamweaver for web design, possible future intergation of the products will be interesting.

Good news! It will be very interesting to see how they integrate the product lines.

Now can Acrobat PLEASE stop crashing?