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Creo and Scitex Create a Leader in Worldwide Digital
Prepress
Vancouver, Canada and Herzlia, Israel -- January 18, 2000: Creo Products
Inc.
and Scitex Corporation Ltd. announced today that they have entered into
an agreement to combine their prepress businesses in the worldwide market
for digital prepress equipment. The combined entity will capitalize on
strong synergies in technology, products, service and distribution to
create a leading provider of worldwide digital prepress solutions.
Under the terms of the agreement, Creo will acquire the assets of Scitex's
digital
preprint business in exchange for 13.25 million Creo shares valued at
some US$537 million, based on the closing price on January 14, 2000. Upon
completion of the transaction, Scitex will become a major shareholder
in Creo with about 27% of the outstanding shares (fully diluted). The
new graphic arts group tentatively named Creo/Scitex will combine the
prepress operations of Scitex and Creo. It will operate as a division
of Creo Products Inc., which will continue to trade under the name Creo.
In a separate press release issued today by Scitex Corporation Ltd., the company stated that in addition to its agreement with Creo, Scitex intends to increase its focus on digital printing and opportunities in Internet-related technologies in the imaging and media sectors. The existing Scitex businesses in these areas include Scitex Digital Printing (SDP), Scitex Wide Format Printing, 50% of Karat Digital Press, 50% of Vio Worldwide Limited, and 18% of Aprion Digital Ltd. Scitex Corporation Ltd. will continue to trade under the name Scitex.
Management of Creo Products Inc. will include representation from both companies. Raffi Amit, Chair of the Board of Creo Products Inc., and Yoav Z. Chelouche, President and Chief Executive Officer of Scitex Corporation Ltd., are to be Co-Chairs of the Board of Creo Products Inc. Amos Michelson, CEO of Creo Products Inc., and Dan Gelbart, Corporate President of Creo Products Inc., will continue in their roles. Rimon Ben-Shaoul, Chairman of the Board of Scitex Corporation Ltd., and Yoav Chelouche will join seven Creo directors on the board of Creo Products Inc.
"We are extremely excited about this development," said Amos Michelson. "Customers around the world will benefit from the product strengths of both companies. The combined R&D infrastructure will allow the new organization to rapidly develop innovative products and deliver maximum value to our customers. We will be in an excellent position at the forefront of digital technology in our fast-evolving industry."
Yoav Chelouche commented: "This move combines the industry's most recognized names and the best human talent with the widest portfolio of leading products and technologies, thereby enabling the new operation to offer enhanced delivery systems and technical support to its customers. We expect that this initiative will deliver significant value and benefit to the shareholders of both companies."
The new organization will operate in the digital prepress market, providing
both
the current Creo and Scitex product lines, including computer-to-plate
and computer-to-film devices, digital front-end and variable information
workflow solutions, inkjet and digital halftone proofing solutions, professional
scanners, digital cameras, and imaging heads for digital offset applications.
The combined operation will include all the prepress operations, products,
and services of Creo and Scitex, and will continue to support all existing
products for the foreseeable future. The BrisqueV and PrinergyV workflow
management systems will offer open connectivity to the output devices
of both parties.
Creo corporate headquarters will remain in Vancouver, Canada. The global operations of Creo/Scitex will be managed from Vancouver and Herzlia, Israel. Distribution and support centers will be located in the U.S., Europe, Japan and Hong Kong. Three R&D and manufacturing sites will operate in Vancouver, Canada; Herzlia, Israel; and Bedford, Massachusetts, in addition to the manufacturing and R&D facilities of Creo's joint-venture partner Heidelberger Druckmaschinen AG in Kiel, Germany.
For the four quarters ending September 30, 1999, the combined digital
prepress
activities of Creo and Scitex generated revenues of approximately US$635
million and operating income of about US$60 million. The new organization
is expected to bring together approximately 4,200 employees worldwide,
of which 1,200 are in Israel, 1,250 in Canada and 1,750 in operations
in the USA, Latin America, Europe, Asia/Pacific, Japan, the Middle East
and Africa.
The transaction will be accounted for by Creo as a purchase and is expected
to
be accretive to Creo's earnings per share before goodwill in the year
of closing.
Closing of the transaction is subject to regulatory approvals and the
approval
of Creo's shareholders at a meeting to be held on March 30, 2000. Upon
completion of the transaction, Scitex will enter into a five-year standstill
agreement which, amongst other things, includes restrictions on acquiring
additional Creo shares, as well as customary transfer, voting and other
restrictions.
Contact: Dr. Shlomo Shamir, President & CEO, T: 781 280 7700. F: 781 275 3430. E: shlomo_shamir@scitex.com