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Press Release:<br><br>
<h3><b>Adobe to Acquire Macromedia <br><br>
<br>
</b></h3><h4><b>Combined Company to Deliver Industry-Defining Technology
Platform for Rich, Interactive Content </b></h4><b>SAN JOSE, Calif. -
April 18, 2005</b> - <a href="http://www.adobe.com">Adobe</a> Systems
Incorporated (Nasdaq: ADBE) today announced a definitive agreement to
acquire <a href="http://www.macromedia.com/">Macromedia</a> (Nasdaq:
MACR) in an all-stock transaction valued at approximately $3.4
billion.<br><br>
The combination of Adobe and Macromedia will provide customers a more
powerful set of solutions for creating, managing and delivering
compelling content and experiences across multiple operating systems,
devices and media. Together, the two companies will meet a wider set of
customer needs and have a significantly greater opportunity to grow into
new markets, particularly in the mobile and enterprise
segments.<br><br>
"Customers are calling for integrated software solutions that enable
them to create, manage and deliver a wide range of compelling content and
applications - from documents and images to audio and video," said
Bruce Chizen, chief executive officer of Adobe. "By combining our
powerful development, authoring and collaboration software - along with
the complementary functionality of PDF and Flash - Adobe has the
opportunity to bring this vision to life with an industry-defining
technology platform."<br><br>
Under the terms of the agreement, which has been approved by both boards
of directors, Macromedia stockholders will receive, at a fixed exchange
ratio, 0.69 shares of Adobe common stock for every share of Macromedia
common stock in a tax-free exchange. Based on Adobe's and Macromedia's
closing prices on Friday, April 15, 2005, this represents a price of
$41.86 per share of Macromedia common stock. Upon the close of the
transaction, Macromedia stockholders will own approximately 18 percent of
the combined company on a pro forma basis. <br><br>
In the combined company, Chizen will continue as chief executive officer
and Shantanu Narayen will remain president and chief operating officer.
Stephen Elop, president and chief executive officer of Macromedia, will
join Adobe as president of worldwide field operations. Murray Demo will
remain executive vice president and chief financial officer. Dr. John
Warnock and Dr. Charles Geschke will remain as co-chairmen of the Board
of Directors of the combined company and Rob Burgess, chairman of the
Macromedia Board of Directors, will join the Adobe Board. <br><br>
"Both Macromedia and Adobe are passionate about creating and
enabling great experiences across a wide range of devices and operating
systems," said Stephen Elop, president and chief executive officer
of Macromedia. "Our combined teams will be a powerful force for
innovation around cutting-edge platforms for delivering content and
applications."<br><br>
<b>Integration <br>
</b>The two companies are developing integration plans that build on the
cultural similarities and the best business and product development
practices from each company. The companies will make additional details
and information about the acquisition
<a href="http://www.adobe.com/aboutadobe/invrelations/adobeandmacromedia.html">click
here</a>.<br><br>
"While we anticipate the integration team will identify
opportunities for cost savings by the time the acquisition closes, the
primary motivation for the two companies' joining is to continue to
expand and grow our business into new markets," said
Chizen.<br><br>
The acquisition, which is expected to close in Fall 2005, is subject to
customary closing conditions, including approval by the stockholders of
both companies and regulatory approvals. The transaction will be
accounted for under purchase accounting rules. <br><br>
Due to the absence at this time of estimates of the acquisition-related
restructuring costs and the allocation of the purchase price between
goodwill, in-process R&D, other intangibles and equity-based
compensation expenses related to SFAS 123R, Adobe is currently unable to
provide GAAP estimates on future earnings.<br><br>
The transaction is currently expected to be break-even to slightly
accretive to earnings in the first twelve months after closing on a
non-GAAP basis. The company's target of break even-to-slightly accretive
to earnings on a non-GAAP basis assumes no adverse impact from the loss
of deferred revenue in the first twelve months following the close due to
purchase accounting.<br><br>
<b>Stock Repurchase Program <br>
</b>Adobe also announced its Board of Directors has approved a
post-acquisition stock repurchase program of $1 billion. "After a
review of the combined companies' financial position, our Board concluded
that the repurchase program is consistent with our overall commitment to
deliver value to our stockholders," Chizen added.<br><br>
The repurchase program is in addition to the Adobe's existing stock
repurchase programs and is expected to commence following the completion
of the acquisition. The repurchases will be funded from available working
capital. <br><br>
<b>About Adobe Systems Incorporated <br>
</b>Adobe is the world's leading provider of software solutions to
create, manage and deliver high-impact, reliable digital content. For
more information, <a href="http://www.adobe.com">click
here</a>.<br><br>
<b>About Macromedia <br>
</b>Experience matters. Macromedia is motivated by the belief that great
experiences build great businesses. Our software empowers millions of
business users, developers, and designers to create and deliver
effective, compelling, and memorable experiences - on the Internet, on
fixed media, on wireless, and on digital devices. <br><br>
<b>Adobe Systems Incorporated<br><br>
</b> MARKET: Graphics, video and business document software<br>
FOUNDED: 1982 <br>
HEADQUARTERS: San Jose, Calif. <br>
CHIEF EXECUTIVE OFFICER: Bruce Chizen<br>
STOCK: ADBE (Nasdaq)<br>
EMPLOYEES: Approximately 4,000 <br>
REVENUE: $1.67 billion in fiscal 2004 <br>
CUSTOMERS: Creative professionals, enterprises and governments, photo
and video hobbyists <br>
MARKET PRESENCE:
<ul>
<li>More than a half-billion copies of Adobe Reader have been distributed
worldwide.
<li>The worlds top 10 PC manufacturers ship their systems with Adobe PDF
technology pre-installed.
<li>More than 700 thousand copies of Adobe Creative Suite shipped in its
first year (October 2004).
</ul><br>
<b>Macromedia, Inc<br><br>
</b> MARKET: Web and application development software<br>
FOUNDED: 1982 <br>
HEADQUARTERS: San Francisco, Calif. <br>
FOUNDED: 1992 <br>
CHIEF EXECUTIVE OFFICER: Stephen Elop <br>
STOCK: MACR (Nasdaq) <br>
EMPLOYEES: Approximately 1,500 <br>
REVENUE: $422 million in CY 2004 <br>
CUSTOMERS: Web and application developers, business users, mobile
ecosystem <br>
MARKET PRESENCE:
<ul>
<li>Macromedia Flash Player is installed on more than 98% of
Internet-connected desktops and more than half a billion users have the
Flash client installed.
<li>More than 25 million Flash-enabled devices have shipped.
<li>Macromedia products are used by 90 percent of Fortune 1000 companies.
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