Vancouver, BC, CANADA (August 16, 2002) – Creo Inc. (NASDAQ: CREO; TSX: CRE) (‘Creo’) today signed a definitive agreement to acquire ScenicSoft, Inc., a privately held company located near Seattle. ScenicSoft develops and markets software for the publishing and printing industries, and is a pioneer in developing digital prepress solutions. Under the terms of the agreement, Creo will acquire ScenicSoft for approximately US$9.5 million in a combination of cash, equity and an assumption of liabilities. The acquisition is expected to close within 90 days and is expected to be accretive to Creo’s adjusted earnings per share within one year from the close.


“After working in partnership with ScenicSoft for the last eight years, Creo welcomes ScenicSoft’s market-leading software for layout and imposition into our product range,” stated Amos Michelson, chief executive officer of Creo. “ScenicSoft is known for its Preps® software, the industry’s leading page imposition layout software for offset printing.” ScenicSoft has built a substantial customer base, with more than 20,000 seats of Preps alone, many of which are installed at the facilities of Creo customers.


Mr. Michelson continued, “Creo also gains several other products that complement our Networked Graphic Production initiative, which integrates all aspects of print-production – from idea to delivery. The added technology, category-leading products, and industry knowledge of the ScenicSoft team will further strengthen our ability to deliver the best solutions to our customers.”


Led by founder and President Erik Smith, ScenicSoft was established in 1985 and currently has 72 employees. ScenicSoft’s print-production software products help streamline and automate prepress workflow. In addition to the Preps imposition package, products include Pandora™, a native PDF step-and-repeat solution for the packaging and label industries; UpFront®, an innovative solution for print-production planning; TrapWise®, a full-featured trapping solution; and Color Central®, an OPI server that automates the time-consuming tasks in the print-production workflow. In addition to its headquarters facility near Seattle, WA, ScenicSoft also operates a development and support center in Turnhout, Belgium.


Terms of the Transaction


Under the proposed terms of the transaction, Creo Acquisition, Inc., a wholly owned subsidiary of Creo, will merge with ScenicSoft. The common share, preferred share and option holders of ScenicSoft will receive an aggregate payment of approximately US$7.2 million at the closing. The Creo subsidiary will also assume approximately US$2.3 million of ScenicSoft’s liabilities. Of the US$7.2 million to be received by ScenicSoft securities holders, US$4.0 million will be payable by Creo one year after the close of the transaction and will be represented by unsecured, non-interest bearing, convertible promissory notes. Creo further has the option to convert these notes into common shares at an average closing price of Creo common shares for the ten days prior to the one-year anniversary of the closing of the transaction.


The completion of the proposed transaction is subject to several conditions, including approval by a majority of the common and preferred shareholders of ScenicSoft and the expiration or waiver of certain notification periods between ScenicSoft and third parties and customers. Creo has entered into a merger voting agreement with certain shareholders of ScenicSoft who represent, in aggregate, over 67 percent of the outstanding ScenicSoft preferred stock and over 67 percent of the outstanding ScenicSoft common stock. Pursuant to this agreement, these shareholders have agreed to vote in favor of the proposed transaction and granted to Creo an irrevocable proxy to vote their respective shares of ScenicSoft in favor of the transaction.


About ScenicSoft


ScenicSoft™ develops and markets software for the publishing and printing industries, and is a pioneer in developing digital prepress solutions.


The company’s full line of print production software helps streamline and automate workflows, featuring products like Preps®, the imposition package; UpFront®, a solution for seamless production planning; TrapWise®, a full featured trapping solution; Pandora™, an entirely native PDF solution for packaging and label imposition jobs; and Color Central®, an OPI server that automates tasks in the print production workflow. ScenicSoft’s products are designed to give users flexibility and choice in the production environment and integrate support for technologies such as PDF and PostScript 3.


In 1999, ScenicSoft acquired Imation Publishing Software Corporation (IPS).


The company provides technology for the world’s largest printers: R.R. Donnelley & Sons, Quebecor, Banta and Quad Graphics. The bulk of America’s most popular magazines, and books such as the most recent Harry Potter novel, are printed using our software.