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Adobe Absorbs Accelio For Acrobat

Adobe Systems Monday said it has finalized its $72 million acquisition of Ottawa, Canada-based Accelio Corp

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 acquisition of Accelio is a major step in the expansion of Adobe's Acrobat business," said Adobe president and CEO Bruce Chizen. "Through the combination of Adobe Acrobat, Adobe PDF technologies and Accelio's server-based solutions, Adobe can now extend Acrobat solutions to enterprise users in Global 2000 businesses, governments and educational institutions, delivering greater value to our customers, shareholders and employees."

The Accelio business will be completely meshed into Adobe's operations, with the former Accelio headquarters functioning as a remote Adobe site in Ottawa. Adobe said some 200 positions would be cut, primarily in redundant sales, general and administrative positions. Accelio, formerly known as JetForm Corporation, last reported about 600 employees in its roster.

Under the terms of the transaction, each Accelio common share was converted to 0.072573 shares of Adobe common stock. In total, Adobe issued approximately 1.81 million shares of Adobe common stock in exchange for all outstanding Accelio common shares. In connection with the transaction, Accelio repurchased all outstanding stock options for cash payments of approximately US$1.3 million.

The buyout is expected to help Adobe better attract enterprise-class customers. In October 2001, Adobe officials estimated that the ePaper and electronic forms market opportunity for Adobe would be more than $3 billion in size by 2004.

"The market for business processes driven by electronic forms is ripe for players with extendable solutions that enable companies to move paper-based processes online," said Meta Group senior vice president Andrew Warzecha. "Organizations are seeking vendors with the right combination of technologies and customer strategies to help stem the increasing volumes of paper they must deal with. These increasing requirements represent an opportunity for a major player to finally emerge in this rapidly evolving segment of the enterprise software market."

As previously announced, Adobe is targeting additional revenue from the acquisition of approximately $30 to $35 million, an acquisition charge in the range of $12 to $15 million, and pro forma earnings per share dilution of approximately $0.02 in fiscal year 2002.