[NPL] Macromedia Acquires Elemental Software
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[NPL] Macromedia Acquires Elemental Software

For Immediate Release:

MACROMEDIA SIGNS DEFINITIVE AGREEMENT TO ACQUIRE ELEMENTAL SOFTWARE

Acquisition Enables Efficient Creation of Database-Driven
e-Business Web Applications Based on Leading Standards

San Francisco, CA - July 12, 1999 - Macromedia, Inc. (NASDAQ: MACR)
today announced a definitive agreement under which Macromedia will
acquire Elemental Software for $24 million in a stock for stock
transaction. Elemental's strength in dynamic Web application
development with products like Drumbeat 2000 and eStore Builder,
combined with Macromedia's leadership in professional Web publishing
with products like Dreamweaver(TM) and Generator(TM), will enable Web
developers to more efficiently create dynamic Web sites for
e-commerce, corporate intranets and personalized content. The
addition of the Elemental products to Macromedia's Web publishing
product family provides the first and only standards-based end-to-end
solution of award-winning Internet software for efficiently creating,
producing and maintaining dynamic Web sites that automate the process
of linking database information to Web applications with reusable
code.

The acquisition represents the most recent step in Macromedia's
strategy to address the challenges facing professional Web developers
with powerful yet practical solutions. Today, Web developers face an
unprecedented level of complexity as the Web evolves from static
pages to dynamic Internet applications that are integrated with
corporate data and back-end enterprise systems. At the same time, Web
development teams are growing in size and diversity, as multiple
departments within enterprises become involved in building discrete,
opportunistic Web applications. As a result, Web development teams
need to both quickly deliver Web applications for specific purposes
at the departmental level, in addition to the larger development of
strategic, mission-critical e-business and intranet applications. In
either case, building Web applications and sites that can be
refreshed regularly and tied into back-end systems is becoming
increasingly important.

"Dynamic Web publishing is one of the most important trends in the
industry today, and developers need an efficient way to build
complex, database-driven Web sites for e-commerce and corporate
intranet applications," said Rob Burgess, Chairman and CEO of
Macromedia. "The acquisition of Elemental strengthens our leadership
position in the Web publishing market and provides immediate growth
opportunities for our existing business, since Elemental's products
complement Macromedia's Web publishing solutions, and can work
alongside them today."

With this acquisition, Macromedia now offers independent and
corporate Web developers the only complete HTML, ASP and JSP solution
for visually developing compelling Web content and dynamically
generated Web sites and applications. "Microsoft is excited to see
Drumbeat 2000 become part of the Macromedia family," said Morris
Beton, general manager of developer programs at Microsoft
Corporation. "Drumbeat is a great way to rapidly deploy Active Server
Pages (ASP) and COM-based Web applications. We look forward to
continuing to work with Macromedia to deliver even more powerful
solutions for ASP and Windows Distributed interNet Applications
developers."

"Macromedia has the brand, reputation and marketing resources to
bring the Drumbeat 2000 product line to the broadest community of Web
publishers and developers," said Peter Hirshberg, president and CEO
of Elemental Software. "Developers can create pages and manage sites
in Dreamweaver, dynamically publish Web site graphics and animation
with Generator, link database content to Web pages with Drumbeat
2000, and easily create e-commerce storefronts with eStore Builder.
Moving forward, the combined product team will draw from the
technology base of both companies in creating the next generation of
solutions for designing, developing and managing dynamic Web-based
applications."

Elemental Software is a privately held company that develops and
markets software that enables corporate users to build the advanced
Web applications for dynamic e-business solutions. Elemental's
products -- Drumbeat 2000 (ASP), Drumbeat 2000 JavaServer Pages
Edition, and eStore Builder for Drumbeat 2000 (ASP) -- enable
developers to build dynamic Web applications for leading server
platforms at a fraction of the typical development time and expense.
Upon completion of the acquisition, the Elemental products will
continue to be sold and supported as part of Macromedia's
industry-leading suite of Web publishing solutions, and will be key
components of Macromedia's overall solution for creating dynamic Web
applications.

Terms of the Agreement

In the transaction, Macromedia will exchange approximately 625,000
shares of its stock for all of the outstanding equity of Elemental,
for a total purchase price of approximately $24 million. The
transaction will be accounted for as a pooling of interests, and is
expected to close within 45 days, subject to satisfaction of
customary closing conditions and regulatory approvals. Macromedia
expects to take a one-time charge of approximately $3.0 million for
expenses related to the acquisition in the current quarter.

About Macromedia

Macromedia's mission is to add life to the Web. By providing its
award-winning Web Publishing, Web Entertainment, and Web Learning
solutions to Web designers, consumers, and the enterprise, Macromedia
is delivering a completely new generation of Internet tools and
technologies designed to transform the Web experience. Headquartered
in San Francisco, Macromedia (NASDAQ: MACR) has more than 500
employees worldwide and is available on the Internet at
http://www.macromedia.com.

 

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