InFocusÆ And ProximaÆ Announce Merger Agreement
Plan To Accelerate Growth Of Multimedia Projection Industry Proposed Transaction Creates Company With Unprecedented Depth Of Technology Expertise Focused On Both Existing And Emerging Projection Markets
InFocusÆ (NASDAQ: INFS) and ProximaÆ (OSE: PRX) announced that they have entered into a definitive agreement to merge the activity of the two entities. InFocus will make a public exchange offer to all shareholders of Proxima. The transaction will bring together two of the world's leading names in multimedia projection solutions. The combined company will be the world's largest developer, manufacturer and marketer of multimedia projection products and services. Multimedia projection systems are designed to project graphics, audio, video and other data from PCs, video and DVD-Video players as well as other digital and electronic devices. This transaction will create a company with technology development and manufacturing centers in the US and Norway, worldwide strength in sales, service and marketing and the most comprehensive product line in the industry. The new company will be uniquely positioned to exploit the tremendous opportunities in the global multimedia projection market which, according to estimates by the industry analyst firm Pacific Media Associates (PMA), is currently growing at over 40 percent per year. By combining their research and development efforts, the new company expects to accelerate development of the most technologically advanced and complete product offerings across a variety of market segments including business, consumer and education. The company further expects to accelerate availability of these products worldwide through an expanded sales, service and marketing organization. ""This business combination will result in a very strong company from top to bottom,"" said InFocus Chairman and CEO John V. Harker. ""The opportunity to combine the complementary strengths of two very strong organizations will allow us to create the pre-eminent multimedia projection company. Together, Proxima and InFocus will have sufficient resources, technical expertise, strength and depth to accelerate the development of new projection system technologies and applications, and expand into new and emerging markets,"" concluded Harker. ""This is a merger of two very strong organizations with similar cultures, business goals and strategies within the same industry,"" said Proxima CEO Ole J. Fredriksen. ""The blending of our combined talents will act to enhance our existing product and service offerings, accelerate our entry into new and fast growing market opportunities and increase shareholder value. We will be much better positioned, as one, to be a strong and formidable competitor in a very competitive market,"" Fredriksen emphasized. Mr. Harker and Mr. Fredriksen also said that the companies expect to generate incremental earnings from synergies that will be created as well as cost savings that will be realized. Anticipated synergies will include such things as reduced product costs, faster time to market based on focused new product development efforts and consolidation of various operational activities. The transaction is not expected to result in employee reductions or facilities closures. The newly formed company will be called InFocus and will continue to market multimedia solutions under all three of its popular brand names: InFocus, PROXIMA and ASK. On a proforma basis, the company would have had total 1999 revenues of approximately $689 million (NOK 5,372 million) and net income of $44 million (NOK 345 million). The proposed transaction calls for Proxima shareholders to exchange each of their shares for 0.3615 shares of InFocus. Following the business combination, Proxima shareholders will comprise approximately 38 percent of the new company and InFocus shareholders approximately 62 percent. John V. Harker current Chairman, President, and CEO of InFocus will become Co-Chairman and CEO of the new company. Ole J. Fredriksen, currently President and CEO of Proxima will become Co-Chairman of InFocus and President of European Operations. The Board of Directors of the new company will consist of the current four directors of InFocus: John V. Harker, Peter D. Behrendt, Michael R. Hallman and Nobuo Mii; and two members of the current Proxima Board of Directors: Svein S. Jacobsen and Einar J. Greve; and Ole J. Fredriksen. The parties will apply for a ruling from the Norwegian Authorities for the exchange for Proxima shares into InFocus shares to be tax-free for Proxima's Norwegian Shareholders. The transaction is currently planned to be accounted for on a pooling of interests basis. InFocus will apply for a secondary listing on the Oslo Stock Exchange, and a prospectus for the offer will be issued as soon as reasonably possible. The business combination has been unanimously approved by the Board of Directors of both InFocus and Proxima. The transaction is expected to be consummated in the second quarter of 2000, subject to the holders of more than 90 percent of Proxima's outstanding shares accepting the offer; approval of InFocus shareholders; a number of regulatory approvals and other customary closing conditions. Salomon Smith Barney is acting as advisor to InFocus and Deutsche Banc Alex Brown is serving as financial advisor to Proxima.