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Adobe Takes Accelio For $72M

Adobe Systems Friday says it has agreed to acquire Ottawa, Canada-based Accelio Corp in a stock transaction valued at $72 million.

The deal still has to go through the U.S. and Canadian regulatory process. If approved by officials and shareholders, the deal should resolve by late March 2002.

The San Jose, Calif.-based Web publishing software giant says it will meld all of Accelio's ePaper business into its operations with a special nod to meshing it into Adobe's famous Portable Document Format (PDF) technologies.

"The migration to electronic forms-driven business processes is accelerating in corporations, governments and institutions around the world," says Adobe president and CEO Bruce Chizen. "Our strong market position with our Adobe Acrobat family of products has helped drive this trend. This acquisition quickly positions Adobe as a leader of business process solutions, which is the logical next step in the evolution of our ePaper platform."

Under the terms of the agreement, Adobe common stock valued at US$72 million on closing will be exchanged for all Accelio equity securities. This translates into approximately $4.50 (CDN) per Accelio share on a fully diluted basis at current exchange rates. Adobe says it expects to record an acquisition charge in the range of $12 to $15 million as a result of the acquisition.

Accelio's boards of directors agreed that Adobe's offering was much better than an unsolicited $42.8 million bid that Waterloo, Canada-based Open Text Software Corp., made back on December 17, 2001.

"Adobe's strategy for expanding its ePaper solutions business is complementary with Accelio's approach, and there are significant synergies in both the technologies we are developing and the markets we serve," says Accelio president and CEO Kevin Francis. "Through the combined strengths of the two companies, we expect that Adobe will have the opportunity to quickly create a more complete enterprise-class solution than either company could have created on its own."

By combining Adobe Acrobat, Adobe PDF technologies and Accelio's server-based solutions, Adobe says it wants to now dominate the industry's solutions for electronic forms applications. The company says this strategy is especially a plus for enterprise-class customers.

The Acrobat product family was the company's fastest-growing business in fiscal 2001, growing in revenue by 41 percent year-over-year. To date, Adobe has distributed over 400 million copies of Acrobat Reader on 13 different platforms. In October 2001, company officials estimated that the ePaper and electronic forms market opportunity for Adobe would be more than $3 billion in size by 2004.

Adobe expects the acquisition will result in pro forma earnings per share dilution of approximately $0.02. The company is also targeting additional revenue from the acquisition of approximately $30 to $35 million in fiscal year 2002.