Completion of the Scitex acquisition is subject to a number of conditions inc. the approval by the Creo shareholders of the issuance of the 13.25 million common shares to Scitex, and approvals under the US Antitrust Improvements Act of 1976 and the antitrust or comparable laws of several other countries

Creo releases Information Circular for March 30 shareholders’ meeting

PR Newswire – February 28, 2000 16:54

Hart-Scott-Rodino Act waiting period expires

VANCOUVER, Feb. 28 /CNW-PRN/ – Creo Products Inc. (NASDAQ: CREO) (TSE: CRE) is pleased to announce that a Management Information Circular has been distributed to shareholders today in preparation for the upcoming Annual and Special Meeting, scheduled for March 30, 2000 in Vancouver.

As previously announced, on January 17, 2000 Creo and Scitex Corporation Ltd. (“Scitex”) entered into an Asset Purchase Agreement providing for the acquisition by Creo of the digital prepress and print-on-demand businesses of Scitex (the “Scitex Business”). At the March 30 meeting, shareholders will consider – among other things – the issuance of 13,250,000 common shares to Scitex as consideration for the Scitex Business. On closing of the acquisition, Scitex will hold approximately 26.1% of Creo’s outstanding common shares on a fully diluted basis.

The Management Information Circular includes a description of the Scitex Business and the combined businesses, as well as audited financial statements of the Scitex Business for the three years ended December 31, 1999, and unaudited pro forma consolidated financial statements of Creo reflecting the acquisition of the Scitex Business.

Net income of the Scitex Business in the year ended December 31, 1999 was US$32.6 million, compared to losses of US$1.1 million in fiscal 1998 and US$8.6 million in fiscal 1997. Total revenue for the year ended December 31, 1999 was approximately US$491.5 million, compared to US$454.1 million in the previous year and US$473.6 million in the year ended December 31, 1997. Product sales and service revenues in fiscal 1999 were US$336.9 million and US$104.8 million, respectively (compared to US$303.3 million and US$103.7 million, respectively, in fiscal 1998, and US$322.2 and US$103.2 million, respectively, in fiscal 1997). Revenues from the sale of supplies were approximately US$49.8 million in fiscal 1999 (compared to approximately US$47.1 million in fiscal 1998 and approximately US$48.2 million in fiscal 1997).

On a pro forma basis, assuming that the acquisition had been completed as of the end of Creo’s most recent financial year (September 30, 1999), the consolidated balance sheet of Creo and the Scitex Business reflects total assets of US$883.2 million, and net equity of US$686.9 million. In addition, on a pro forma basis as if the acquisition had occurred at the beginning of Creo’s 1999 fiscal year, the combined entity discloses total revenues of US$669.8 million, gross profit of US$291.3 million, and operating income of US$45.4 million. As disclosed in Creo’s financial statements for the year ended September 30, 1999 previously mailed to shareholders, Creo’s total revenues on a stand-alone basis were US$178.3 million, with gross profit of US$83.8 million and operating income of US$29.5 million.

Creo expects that significant synergies, including cost and capital savings, will result from the combination of its business and the Scitex Business, creating a broader platform for Creo’s further growth. Management also expects that customers will benefit from the combination of product and service offerings, the expansion of these offerings into new markets, and improved efficiencies, and that the business prospects for printCafe – Creo’s recently announced e-commerce initiative with, among others, Prograph, Inc. – will be significantly improved.

Completion of the acquisition is subject to a number of conditions. Among these are the approval by the Creo shareholders of the issuance of the 13.25 million common shares to Scitex, and approvals under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 of the United States (“HSR Act”) and the antitrust or comparable laws of several other countries, including certain countries in Europe and Latin America. The applicable waiting period under the HSR Act has expired, and application for the other approvals has been made or will be made shortly.

Upon completion of the acquisition, the new graphic arts group – tentatively named Creo/Scitex – will operate as a division of Creo Products Inc., which will continue to trade under the name Creo (NASDAQ: CREO; TSE: CRE).