FOR IMMEDIATE RELEASE
WEDNESDAY, 17TH JUNE 1998
CARLTON TO ACQUIRE NIMBUS FOR $264m
Carlton Communications Plc, owner of Technicolor, announced today it has entered
into a merger agreement to acquire Nimbus CD International Inc., one of the
world's leading independent manufacturers of optical discs, including DVD,
DVD-ROM, CD-Audio and CD-ROM. Carlton plans to expand the business alongside
Technicolor, the world leader in manufacturing and distributing pre-recorded
videocassettes, which also has a growing business in manufacturing and
distributing optical discs.
Following the agreement, Carlton will make a cash tender offer of $11.50 per
share for all the outstanding shares, valuing Nimbus at approximately $264m
(Pounds Sterling 174m). Stockholders and management of Nimbus owning an
aggregate of 9,373,322 shares, representing approximately 44 per cent of Nimbus'
common stock, have agreed to tender their shares into Carlton's tender offer. In
the year ended 31st March 1998, Nimbus reported pre-tax profits of $21m,
compared with $14m in the previous year.
Michael Green, Chairman of Carlton, said:
"Technicolor is becoming the leading manufacturer and distributor of optical
discs. Just as the company added videocassettes to its film operations in the
'80s, now we are adding optical discs in the '90s. The penetration of VCRs, DVD
players and PC disc drives are all growing as part of the world wide expansion
of screen-based entertainment. Working together with Nimbus, we can serve a
larger part of the growing global market"
Lyndon Faulkner, Chairman and Chief Executive Officer of Nimbus, said:
"Nimbus and Technicolor are an excellent match and we look forward to working
with one of the most respected names in the packaged media industry. Together we
will be able to expand on the service that we provide to all our customers.
Technicolor has real distribution expertise. Nimbus has demonstrated the
strength of its CD-Audio and CD-ROM capabilities. As a leader in DVD production
we believe there is great potential for rapid growth as a supplier of DVD-Video,
Divx, and DVD-ROM products to the home entertainment and computer software
industries."
DVDs are capable of storing an entire film on one CD-sized disc. DVD players
were launched in the US in 1997 with first year sales of approximately 200,000
units. By comparison, sales of VCRs when introduced in 1975 took two years to
reach this level of market penetration. Over 1000 different DVD titles have been
published and the format is supported by all the major Hollywood studios.
DVD-ROMs are a CD-sized discs capable of storing up to 14 times more information
than CD-ROMs, allowing for significantly improved video and sound. DVD-ROM
drives are forecast to become standard in all PCs and independent forecasts
predict sales of over 2 billion DVD-ROMs in the US and Europe by 2003.
Based in Charlottesville, Virginia, Nimbus has the capacity to produce 260m CDs
and recently announced its intention to increase its DVD and Divx annual
capacity to 28m units. Nimbus serves over 2,000 customers and is one of a select
group of Microsoft Authorised Replicators. The company recently signed a five
year agreement with Digital Video Express, LP, to replicate the new Divx discs.
The acquisition will strengthen and expand Technicolor's leading position as a
global supplier of packaged media services. Technicolor is already the world's
largest producer and distributor of pre-recorded videocassettes for the
Hollywood studios and has a growing business in manufacturing optical discs.
Technicolor, with the capacity to produce 650m videocassettes and 40m CDs a
year, recently announced the trebling of its DVD capacity to 15m units a year.
Together with Nimbus, Technicolor will be able to provide a fully integrated
service of mastering, manufacturing and distribution in every major format in
all the key markets. Production and distribution operations will cover the US,
continental Europe and the United Kingdom. The two businesses will serve a wide
range of customers, including publishers of audio CDs, CD-ROMs, DVDs and
DVD-ROMs. Combined DVD capacity will be almost 50m units a year.
- ENDS -
For further information, please contact:
David Cameron Carlton Communication Plc 0171 663 6363
Steve Minkel Nimbus CD International, Inc. 00 1 804 985 1100
(ext 371)
NOTES TO EDITORS:
1. Technicolor Video, based in Camarillo, California is the world's largest
producer of pre-recorded videocassettes. Technicolor Film, based in North
Hollywood, is the world's largest processor of motion picture film.
Technicolor also has US facilities in New York, Michigan and Tennessee, a
new business in Mexico and European plants in the United Kingdom, Holland,
Italy, Spain and Denmark. Technicolor's leading customers include the
Hollywood studios, Disney, Warner, Columbia Tristar, DreamWorks, Polygram
and New Line.
2. Nimbus is one of the world's leading independent manufacturers of optical
discs: distributed throughout North America, the United Kingdom and
continental Europe. Nimbus is at the forefront of optical disc
manufacturing technologies and provides complete DVD software and audio
production services. As at 31st March 1998, the company had net assets of
$66m, including net debt of $18m.