Thomson to Buy Grass Valley Group

Paris-A pioneer in digital broadcast products and systems, Thomsonmultimedia announced that it has entered into an agreement to acquirethe Grass Valley Group, a privately held digital media leaderheadquartered in Nevada City, California.

The Grass Valley Group is a widely recognized leader in the digitalbroadcast equipment and Internet streaming markets. It offers hardwareand software solutions for creating, storing, manipulating, anddistributing high-quality video content. Its installed base of servers,switchers, routers, modular products and digital news productionsolutions touch nearly 80 percent of the world’s televisionsignals. The company had revenues of approximately $200 million in 2000calendar year.

The foreseen acquisition will further extend Thomson Broadcast'sdigital solution portfolio and strengthen its position as a keysupplier of integrated and networked broadcast solutions for contentproviders. Valued at U.S. $172 million to be paid in cash at closing,the transaction remains subject to regulatory approvals and is expectedto be completed in the first half of 2002. After synergies, Thomsonexpects this transaction to be accretive for its shareholders in thefirst full year of operation.

“There will be a significant gain in this combination for ourcustomers in professional content creation, editing and distribution— no matter where they are in the digital media chain. The GrassValley Group’s video expertise will leverage our capacity to helpvideo professionals work on any content, any time, any place”said Marc Valentin, vice president, Thomson Broadcast Solutionsbusiness.

”Becoming part of a global portfolio company focused on thedigital media opportunity is one of the best things that could happento the Grass Valley Group’s customers and to the companyitself.” said Tim Thorsteinson, president and CEO of the GrassValley Group. “In a nutshell, it means uninterrupted productdelivery, accelerated research and development, and tremendousdistribution and service reach”.

The proposed transaction fits into the development strategy ofThomson’s Digital Media Solutions (DMS), a business segmentfocused on business-to-business solutions for content providers,broadcasters and network operators. Early this year, Thomson enlargedits broadcast activities when it acquired a majority interest in thePhilips Professional Broadcast Group. Already a leader in Europe, thetransaction will reinforce Thomson access to a very strong U.S.professional customer base.

Combination will position Thomson as a leading provider ofDigital Networked Broadcast Solutions.

Consummation of transaction will create a combined entity able tooffer complementary technologies and a complete range of networkedproducts and end-to-end solutions for the video value chain—onewith an increased geographical reach and a reinforced ability toleverage the broadband opportunity. Specifically Thomson will benefitfrom: ·

An Outstanding Product Portfolio. Thomson’s product offeringwill be enlarged with an outstanding portfolio of flexible andstandards-based products for integrated infrastructures. Thisstate-of-the-art combined product offering would include a completerange of switchers, routers, modular products, Emmy® award-winningstorage area network (SAN) systems and video servers, and best-in-classdigital news production solutions. ·

A Greater Geographical Coverage. As a result of an enlarged customerbase, Thomson will be able to expand the reach of its products andsolutions, in particular its acquisition and capture businesses (Cameraand Digital film). ·

A Reinforced Broadband Offering. Thomson will extend its ability tohelp professionals make the full transition to digital, including theoptimization of their media asset management, by reinforcing itsposition in the fastest growing networked broadcast market segmentleveraging Grass Valley Group’s expertise in video compression,storage, and networking technologies.