SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 29, 2000
PINNACLE SYSTEMS, INC.
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(Exact name of registrant as specified in its charter)
California 0-24784 94-3003809
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(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification No.)
280 North Bernardo Ave., Mountain View, California 94043
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(Address of principal executive offices of Registrant, including zip code)
(650) 237-1600
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(Registrant's telephone number, including area code)
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Item 5. Acquisition or Disposition of Assets
On March 29, 2000, Pinnacle Systems, Inc., a California corporation
("Pinnacle"), completed the acquisition of Puffin Designs, Inc. ("Puffin"), a
privately held provider of content creation solutions made by and for
professionals working in broadcast, film and video content creation markets. The
Puffin acquisition was made pursuant to the terms and conditions of an Agreement
and Plan of Reorganization dated March 24, 2000 (the "Puffin Agreement") and was
effected by the merger of a wholly-owned subsidiary of Pinnacle with and into
Puffin Designs, Inc., with Puffin being the surviving corporation and becoming a
wholly-owned subsidiary of Pinnacle. Under the terms of the Puffin Agreement,
Pinnacle issued 360,352 shares of its common stock and assumed outstanding
options and an outstanding warrant to purchase shares of Puffin Common Stock
valued in aggregate at approximately $13.0 million. In addition, Pinnacle
assumed liabilities of approximately $2.0 million. Pinnacle will account for the
acquisition as a purchase and anticipates that a portion of the purchase price
will be charged as in-process research and development and other non-recurring
costs in the quarter ending March 31, 2000. The purchase price was determined
through an arm's-length negotiation between the parties.
Also, on March 30, 2000, Pinnacle completed the acquisition of Digital
Editing Services, Inc. ("DES"), a privately held provider of real-time video
analysis and database solutions. The DES acquisition was made pursuant to the
terms and conditions of an Agreement and Plan of Merger dated March 29, 2000
(the "DES Agreement") and was effected by the merger of DES with and into a
wholly-owned subsidiary of Pinnacle with DES being the surviving corporation and
becoming a wholly-owned subsidiary of Pinnacle. Under the terms of the DES
Agreement, Pinnacle issued 287,752 shares of its common stock valued at $7.0
million and paid cash of $300,000. In addition, Pinnacle assumed liabilities of
approximately $1.0 million. The DES Agreement also includes an "earnout" in
which the stockholders of DES will receive addition consideration if the
acquired operating group achieves certain sales and profit levels during the
earnout period, which is the first twelve full months following the acquisition.
Pinnacle will account for the acquisition as a purchase and anticipates that a
portion of the purchase price will be charged as in-process research and
development and other non-recurring costs in the quarter ending March 31, 2000.
The purchase price was determined through an arm's-length negotiation between
the parties.
On April 6, 2000, Pinnacle completed the acquisition of Montage Group,
Ltd. ("Montage"), a privately held provider of networked non-linear editing. The
Montage acquisition was made pursuant to the terms and conditions of a Stock
Acquisition Agreement and dated April 6, 2000 (the "Montage Agreement") under
which Pinnacle acquired all of the outstanding capital stock of Montage. Under
the terms of the Montage Agreement, Pinnacle issued 125,224 shares of its common
stock valued at $3.7 million. In addition, Pinnacle assumed liabilities of
approximately $2.0 million. The Montage Agreement also includes an "earnout" in
which the stockholders of Montage will receive addition consideration if the
acquired operating group achieves certain sales and profit levels during the
earnout period, which is the first two years following the acquisition. Pinnacle
will account for the acquisition as a purchase and anticipates that a portion of
the purchase price will be charged as in-process research and development and
other non-recurring costs in the
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quarter ending June 30, 2000. The purchase price was determined through an
arm's-length negotiation between the parties.
Item 7. Financial Statements and Exhibits.
c. Exhibits.
99.1 Press Release dated March 29, 2000
99.2 Press Release dated April 7, 2000
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
PINNACLE SYSTEMS, INC.
Dated: April 12, 2000 By: /S/ Mark L. Sanders
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Mark L. Sanders, President and Chief
Executive Officer
Dated: April 12, 2000 By: /S/ Arthur D. Chadwick
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Arthur D. Chadwick, Vice President,
Finance and Administration and Chief
Financial Officer
EXHIBIT 99.1
Pinnacle Systems, Inc. Acquires Puffin Designs, Inc.
MOUNTAIN VIEW, CA , 3/30/2000--Pinnacle Systems, Inc. (NASDAQ:PCLE), a leader in
professional and consumer video solutions, announced today that it has acquired
Puffin Designs, Inc. of Sausalito, California. Puffin Designs, a privately held
company, is an industry-leading provider of content creation solutions made by
and for professionals working in broadcast, film, and video content creation
markets. Puffin Designs has developed and sells an advanced set of software
tools for real-time paint, rotoscoping and visual motion tracking.
These Puffin Designs tools allow content producers to create more compelling
special effects and visuals and subsequently publish them on tape, film, DVDs
and Web pages. Pinnacle Systems plans to integrate Puffin Designs technology
with its family of industry leading content creation solutions to provide
complete solutions for creating programs for film, broadcast and streaming media
markets.
Mark Sanders, President and CEO at Pinnacle Systems said, "Pinnacle Systems has
long admired Puffin Designs technology and the talented team. This acquisition
will allow Pinnacle Systems to leverage its already strong position in creation
and distribution of rich media content over broadcast networks and on the
Internet. This acquisition is part of our strategy to build a low-cost,
high-quality infrastructure that will be essential for the next technological
wave as broadband Internet connectivity enables full quality video on the web."
Ajay Chopra, Chairman of the Board at Pinnacle Systems said, "We are delighted
to have the Puffin Designs team join Pinnacle Systems. We are also very pleased
that Scott Squires, founder of Puffin Designs, will join Pinnacle Systems as
Creative Visionary - a newly created position. Scott and his colleagues from
Industrial Light & Magic (ILM) were nominated for the Academy Award this week in
the Visual Effects category for their work on Star Wars: Episode 1 The Phantom
Menace. Scott's mix of creative and technical talent will be a tremendous asset
as Pinnacle Systems builds on its leadership position in creation and
distribution of rich media."
"Puffin Designs is pleased to be joining forces with Pinnacle Systems. Our
customers and products will benefit greatly from the combined resources of the
two companies. I look forward to continuing the vision behind Puffin Designs
products at Pinnacle Systems," said Scott Squires, founder of Puffin Designs.
Pinnacle Systems is acquiring all intellectual property, product and software
rights, along with all other assets and liabilities of Puffin Designs, and will
account for this transaction as a purchase. Under the terms of the
stock-for-stock purchase agreement, Pinnacle Systems will issue approximately
360,000 shares of Pinnacle Systems common stock in exchange for all outstanding
shares of Puffin Designs, and will assume all outstanding Puffin Designs
employee stock options. This equates to an approximate purchase price of $13
million based on yesterdays Pinnacle Systems closing stock price, plus the
assumption of up to $2 million in debt and assumed liabilities.
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About Pinnacle Systems, Inc.
Pinnacle Systems' broadcast, desktop, and consumer products provide video
professionals and consumers cutting-edge digital video tools to create, store,
distribute and view web enabled digital video easier and more affordably than
ever before. Pinnacle Systems may be reached at (650) 526-1600 or on the World
Wide Web at www.pinnaclesys.com.
####
All trademarks and registered trademarks are the property of their respective
owners and are used for identification or reference purposes only, with no
intent to infringe on copyrights.
All original content is copyright (C)1998-1999, Pinnacle Systems.
EXHIBIT 99.2
Pinnacle Systems to Offer Total News and Sports Solutions
Acquired Montage Group and Digital Editing Services
MOUNTAIN VIEW, Calif. , 4/7/2000--Pinnacle Systems, Inc. (NASDAQ: PCLE), a
leader in professional and consumer video solutions, today announced the
acquisition of Montage Group Inc., a pioneer of networked non-linear editing,
and Digital Editing Services Inc. (DES), a leader in real-time video analysis
and database solutions.
As a result of these two acquisitions, Pinnacle Systems is launching an exciting
broadcast and Internet news solution, Totally Networked News(TM) comprised of
networked news solution, VorteXNews(TM), and a new networked sports video server
and analysis solution, Omega. "We believe that networked content creation
solutions in news and sports can provide exciting growth potential as broadband
networks are widely deployed," said Mark Sanders, president & CEO of Pinnacle
Systems, Inc. "News and sports are two of the most critical revenue drivers for
broadcasters, cable operators and web content producers. Our strategic aim is to
supply these important markets with compelling solutions that scale across the
broadcast, cable and Internet marketplace."
"The Montage Group and DES are proud to be part of the Pinnacle Systems family,
and we look forward to working together to develop the best, most comprehensive
solutions for broadcasters and sports organizations across the country," said
Dave Engelke, president of both the Montage Group Inc and DES.
About VorteXNews(TM)
VorteXNews gives users the ability to ingest, edit, store, broadcast and stream
to the Internet live news and sports content entirely in the digital domain. It
is BroadNeTTM compliant, enabling graphics and text to be easily moved across
networks for seamless production. Stations can network this non-linear newsroom
editing system, to digitize video feeds from tape or via satellite as it's
streaming into the facility. The digitized video can be stored on a networked
video server to enable immediate access to content by the entire news production
team.
"As content creators and distributors make the switch from tape to
digitally-based solutions, they will need comprehensive editing and graphics
solutions that integrate seamlessly," said Bob Wilson, vice president for
broadcast group at Pinnacle Systems, Inc. "Broadcasters and webcasters need a
fast and flexible networked solution for content having time value - a `Totally
Networked News Solution'. This is a major step in our continuing drive to supply
innovative solutions for broadcasters and webcasters."
About Omega Sports
A fast growing segment of the video marketplace is making networked video
content easily available for analysis and re-purposing. The Omega sports package
from DES has been chosen by many
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leading professional and college teams for their video server and image database
needs. Leading NFL teams such as the Denver Broncos, New York Jets, and Seattle
Seahawks as well as some of the nations top college teams such as Stanford, UC
Berkley, UCLA, Wisconsin and Florida State University have chosen the Omega
system. Pinnacle Systems intends to leverage DES's market positions with its own
industry leading video platform technologies and streaming solutions as sports
organizations and rights holders expand the use of video at live venues as well
as streaming their content to the Internet.
Details About the Acquisitions
Pinnacle Systems is acquiring all intellectual property, product and software
rights, together with all other assets and liabilities of both Montage Group and
DES, and will account for both transactions as a purchase. Under the terms of
the two stock-for stock purchase agreements, Pinnacle Systems will issue a total
of approximately 400,000 shares of Pinnacle Systems common stock in exchange for
all outstanding shares of both Montage Group and DES. This equates to an
approximate combined purchase price of $12 million, plus the assumption of
approximately $3 million in assumed liabilities. In addition, Pinnacle Systems
will pay additional "earn-out" amounts for each company based on their
respective sales and profitability during the following 12 months for DES and
the following 24 months for Montage Group. The DES purchase transaction closed
on March 30, 2000 and the Montage purchase transaction closed on April 7, 2000.
About Pinnacle Systems, Inc.
Pinnacle Systems' broadcast, desktop, and consumer products provide video
professionals and consumers cutting-edge digital video tools to create, store,
distribute and view web enabled digital video easier and more affordably than
ever before. Pinnacle Systems may be reached at (650) 526-1600 or on the World
Wide Web at www.pinnaclesys.com.
####
All trademarks and registered trademarks are the property of their respective
owners and are used for identification or reference purposes only, with no
intent to infringe on copyrights.
All original content is copyright (C)1998-1999, Pinnacle Systems.
