Thomson Multimedia to Acquire Grass Valley Group

Thomson Multimedia (Paris) has announced that it has entered into anagreement to acquire the Grass Valley Group, a privately held digitalmedia leader headquartered in Nevada City, California.

The Grass Valley Group is a widely recognized leader in the digitalbroadcast equipment and Internet streaming markets. Its installed baseof servers, switchers, routers, modular products and digital newsproduction solutions touch nearly 80 percent of the world’stelevision signals. The company had revenues of approximately $200million in 2000 calendar year.

The proposed 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 help videoprofessionals work on any content, any time, any place" said MarcValentin, vice president, Thomson Broadcast Solutions business.

"Becoming part of a global portfolio company focused on the digitalmedia opportunity is one of the best things that could happen to theGrass Valley Group's customers and to the company itself," said TimThorsteinson, president and CEO of the Grass Valley Group. "In anutshell, it means uninterrupted product delivery, accelerated researchand development, and tremendous distribution and service reach."

The proposed transaction fits into the development strategy ofThomson's Digital Media Solutions (DMS), a business segment focused onbusiness-to-business solutions for content providers, broadcasters andnetwork operators. Early this year, Thomson enlarged its broadcastactivities when it acquired a majority interest in the PhilipsProfessional Broadcast Group. Already a leader in Europe, thetransaction will reinforce Thomson access to a very strong U.S.professional customer base.

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 offering will beenlarged with an outstanding portfolio of flexible and standards-basedproducts for integrated infrastructures. This state-of-the-art combinedproduct offering would include a complete range of switchers, routers,modular products, Emmy award-winning storage area network (SAN) systemsand video servers, and best-in-class digital news productionsolutions.

• 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.