Macromedia to buy Altsys Corp. p. 31

By: Jim Rosenberg SAN FRANCISCO-BASED multimedia software tools developer Macromedia signed a definitive agreement to acquire all outstanding shares of Altsys Corp. stock for 4.3 million shares of its common stock in a deal valued at just under $71 million.
The acquisition is subject to Macromedia shareholders' approval, will be treated as a pooling of interests and is expected to be completed in January.
In a prepared release late last month, Macromedia president John Colligan said the acquisition will quadruple his company's registered customer base to more than 250,000.
Altsys and Macromedia said they will begin working together immediately under terms of a separate agreement.
Altsys will remain in Richardson, Texas, as the Digital Arts Group of Macromedia, where its cofounders, chief executive Jim von Ehr and engineering vice president Kevin Crowder, will become group vice president and general manager and Macromedia product integration vice president, respectively. Both are to be nominated as Macromedia directors.
Also in January, Altsys is slated to regain control of the FreeHand illustration program it developed. FreeHand had been licensed to Aldus Corp., which is giving up its marketing rights as a result of its merger with Adobe Systems Inc., creator of Illustrator, FreeHand's principal competitor.
Complementing FreeHand is Altsys' Fontographer font-editing program.
In mid-October, Altsys, Adobe and the Associated Press announced they will work toward adoption of Adobe's Portable Document Format for news graphics and will define PDF extensions to enhance the exchange of illustration files. Adobe Illustrator already supports the PDF.
Development of a version of FreeHand that will create and open PDF files will allow graphics to be drawn in Illustrator or Adobe and to be opened and edited in either application (E&P, Oct. 29, p. 30).
AP graphics director John Monahan said he had only just learned of the planned acquisition upon release of the announcement. He said that as far as he knew, "the acquisition of Altsys by Macromedia shouldn't change anything" with respect to the AP-Altsys relationship.
Calling Macromedia's acquisition of Altsys "very exciting," Monahan added, "I think this favors everyone involved."
Altsys was a small company compared to Aldus and Adobe; it is tiny compared to the newly merged Adobe. But its acquisition by Macromedia may bring its products development dollars and a big pool of prospective customers. It also puts those products into a multimedia environment capable of supporting on-line, on-screen, news graphics that incorporate animation, narration and three-dimensional presentation.