Roxio buys MGI Software for $51.7 million
The deal is a stock swap 2.3 million shares of Roxio stock will be issued to MGI shareholders. That works out to 0.05269 Roxio shares for each share of MGI.
Based on Monday's closing price, the deal values each MGI share at about $1.18. The shares closed Monday at $1.05 and rose 5 cents to close at $1.10 on Tuesday.
- FROM Nov. 28, 2001: MGI shares plunge on possible sale of business
Roxio makes Easy CD Creator (for Windows) and Toast (for Macintosh), the best-selling CD-burning software products in the world. Roxio and MGI both bundle their software with digital cameras and computers and also sell their software through big retailers.
"We at MGI are excited about the opportunity to join with Roxio and to take our leadership in digital imaging and video to the next level by becoming part of a leading digital media company,'' MGI chief executive Anthony DeCristofaro said in a release.
"Roxio has a solid track record of profitable growth and positive momentum and we believe the acquisition is a great strategic opportunity to realign MGI to capitalize on our technology and engineering prowess in these markets."
Roxio expects MGI to contribute approximately $25 million US in revenues for fiscal 2003 and to be accretive to its pro forma earnings. The deal is expected to close in 90 days. The boards of both companies are recommending shareholders vote in favour.
In its most recent earnings report filed Sept. 6, MGI said it lost $9.3 million (23 cents a share) in the three months ending July 31, 2001 on revenues of $8.15 million.