EXHIBIT 99.1
Pinnacle Systems, Inc. announces agreement to Acquire HP's
Video-Server Business
Pinnacle Systems Strengthens its Market Position in Providing Leading
Media Server Solutions for Video Distribution to the Broadcast-television and
Internet-broadcast Marketplaces
MOUNTAIN VIEW and PALO ALTO, Calif., 6/30/99-- Pinnacle Systems, Inc. (NASDAQ:
PCLE - news) and Hewlett-Packard Company (NYSE: HYP - news) today announced that
the companies have signed an asset-purchase agreement to sell HP's
broadcast-video-server business to Pinnacle Systems.
Under the terms of the definitive agreement, Pinnacle Systems will acquire
practically all assets of HP's Video Communications Division, including key
technologies and intellectual property, the MediaStream family of products and
selected additional assets, as well as most managers and employees.
The full purchase price will be paid at closing and is expected to be about $40
million, adjusted for changes in inventory and backlog as of the closing date.
One third of the final purchase price will be paid in cash, and the remaining
two thirds will be paid in Pinnacle Systems common stock. The transaction is
expected to close in early August, contingent upon regulatory approval.
"We are delighted to have the opportunity to bring our two world-class teams
together, especially at a time of unprecedented change in the digital-video
marketplace," commented Mark Sanders, president and chief executive officer of
Pinnacle Systems. "HP's new MediaStream servers 700 and 1600 complement
Pinnacle's Thunder and iThunder video servers, and will offer broadcasters and
video distributors over the Internet an advanced set of solutions for the
storage and distribution of high-quality digital media. We welcome the injection
of HP's talent and technology, and the advantages it will bring Pinnacle in
providing industry leading solutions to create and distribute digital video
content."
"The synergies in our two businesses made it readily apparent that we could
capitalize on our mutual strengths by simply eliminating barriers between us and
combining our two digital-video groups," said Tom White, vice president and
general manager of HP's Communications Solutions Group. "We value the
relationships we have built in this marketplace and will implement a program
with Pinnacle to provide a seamless transition for our existing customers. We
believe that they will be better served by the new breadth of services under
Pinnacle Systems' management."
The agreement, under which HP will receive most of the purchase price in
Pinnacle Systems stock, which also includes a technology-transfer agreement,
underscores the two companies' vested interest in a successful merger of
operations toward an improved product and service offering. The small number of
HP employees who do not join Pinnacle Systems will be reassigned within HP.
About Pinnacle Systems' Video Server Products
Pinnacle Systems' Thunder multi-channel media server was introduced at the
National Association of Broadcaster's (NAB) convention in April, 1999 where it
was named Television Broadcast magazine's Editor's Pick of the Show. Thunder is
capable of DV or MPEG2 encoding and is initially targeted at users who need two
or four channels of record/play, includes sophisticated key processing, provides
for transitions between clips and enables users to browse video over standard
computer networks. First deliveries of Thunder commenced in June 1999.
About HP's Server Products
HP's Video Communications Division introduced its first products in 1992 and
pioneered MPEG2-based broadcast-quality video servers. The new MediaStream
servers 700 and 1600 that debuted at this year's NAB are HP's third-generation
products. They are currently shipping and already have been chosen by a number
of major broadcast organizations as the backbone of their mission critical
on-air digital-media-distribution needs. The MediaStream family of products is
targeted at installations where a large number of playout channels are required
and features an HP-developed method for MPEG2 encoding schemes for the most
efficient storage of high-quality video available in the market.
About HP
Hewlett-Packard Company -- a leading global provider of computing and imaging
solutions and services for business and home -- is focused on capitalizing on
the opportunities of the Internet and the proliferation of electronic services.
HP had computer-related revenue of $39.5 billion in its 1998 fiscal year. HP
plans to launch a new company consisting of its industry-leading
test--and-measurement, semiconductor products, chemical-analysis and medical
businesses. These businesses represented $7.6 billion of HP's total revenue in
fiscal 1998. With leading positions in multiple market segments, this
technology-based company will focus on opportunities such as communications and
life sciences.
HP has 123,000 employees worldwide and had total revenue of $47.1 billion in its
1998 fiscal year. Information about HP, its products and the company's Year 2000
program can be found on the World Wide Web at http://www.hp.com or at
www.hp.com/go/broadcast.
About Pinnacle Systems
Pinnacle Systems' broadcast, desktop, and consumer groups provide video
professionals and consumers, the digital-video-editing tools needed to create
great productions faster and more affordable than ever before. These innovative
tools perform a variety of on-air, production, and postproduction functions such
as the addition of special effects, image management, capture, storage, playout,
as well as graphics and title creation, storage, and playout. Pinnacle Systems
may be reached at 650-526-1600.
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