Bitstream Sells Font Business to Monotype
Monday, November 14, 2011
Press release from the issuing company
Bitstream Inc. today announced that it has entered into a definitive agreement to sell its font business to Monotype Imaging Holdings, Inc. (NASDAQ: TYPE) in a cash merger valued at $50 million, subject to closing adjustments. The transaction will be effected as a cash merger of a subsidiary of Monotype Imaging into Bitstream. Prior to the closing of the merger, Bitstream will distribute to Bitstream shareholders shares of a newly-formed company, Marlborough Software Development Holdings Inc. (”MSDH”), that was formed to hold all of Bitstream's non-font assets, including the Pageflex business and Bolt browser technology. MSDH will also assume certain liabilities from Bitstream, primarily those related to the non-font assets.
Commenting on these developments, Bitstream’s chairman and interim CEO, Amos Kaminsky, stated "We are pleased with the developments announced today. We believe these proposed transactions will provide Bitstream shareholders with significant cash proceeds by monetizing Bitstream's legacy font business for an amount which represents most of Bitstream’s current market capitalization, while providing shareholders with continuing "pure play" ownership of Bitstream's Pageflex business and Bolt technology."
Kaminsky added, ”The board of Bitstream has named Pinhas Romik, who is currently the General Manager of the Bitstream Pageflex business, to serve as the CEO of MSDH effective immediately. Pinhas has been manager of our Pageflex division with responsibilities for the integration of the iWay acquisition, as well as helping foster significant relationships such as the one we have recently established with Heidelberg. It is logical for Pinhas to serve as the Chief Executive Officer of MSDH and to continue to serve in that role should the spin-off occur.”
Mr. Romik stated, "I want to thank the current board members of Bitstream for their support. I continue to be excited by the opportunities for Pageflex as a leader in the print and marketing automation tools business. I am also excited about opportunities to extend the reach of our Bolt browser technology.
Mr. Kaminsky noted that, “In the event the spin-off occurs, the board of MSDH will be comprised of Jon Kagan, Mel Keating, myself, and Raul Martynek, who will serve as Chairman of the Board. This will ensure consistency at both the management and board levels.” Messrs. Kagan, Keating, and Martynek joined the Bitstream board in the first half of 2010 and since that time have been involved in all aspects of the company's pursuit of its strategic alternatives. Mr. Kaminsky added, “We are also pleased that Bitstream’s CFO Jim Dore will act as Executive Vice President and Chief Financial Officer for MSDH and has agreed to remain in these roles following the spin-off.”
Mr. Martynek stated, "I want to thank the employees of Bitstream for their contribution to the success of the company. We are looking forward to the opportunity to grow the Pageflex business and to create additional value for its shareholders."
Bitstream anticipates that the merger and the spin-off of MSDH will be taxable transactions to Bitstream’s shareholders. These and other considerations will be set forth in greater detail in a proxy statement to be filed with the Securities and Exchange Commission in connection with the special meeting to approve the merger transaction. The merger transaction is subject to the completion of customary closing conditions, including the consummation of the spin-off transaction, and the approval of Bitstream’s shareholders.
The spin-off transaction is subject to the effectiveness of the registration statement on Form S-1 filed today with the Securities Exchange Commission with respect to the spin-off transaction. The merger and spin-off transactions are expected to close in the first quarter of 2012.
Additional information regarding MSDH and the proposed spin-off is contained in the registration statement filed by MSDH regarding the spin-off transaction. The registration statement relating to the MSDH securities has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective.
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