By Gail Kailing with WTT staff January 23, 2002 -- As information develops regarding yesterday’s announcement by Creo surrounding the acquisition of more Printcafe shares, and the offer to acquire all outstanding shares, WhatTheyThink.com will bring you more coverage. In the meantime, a number of facts about the companies follow. Printcafe responded to Creo’s announcement with a brief release to the effect that its Board of Directors had not received a “formal offer” from Creo. Printcafe's Board will meet to evaluate and fully consider any offer made by Creo. The Board of Directors: Who’s on First? Creo’s Board of Directors Charles E. Young, Chair of the Board, President and Chief Executive Officer, Marin Investments Ltd. Yeoshua Agassi, Chief Executive Officer, Scitex Corporation Ltd. Douglas A. Brengel, Senior Managing Director, Salomon Smith Barney Inc. Mark Dance, Chief Financial Officer and Chief Operating Officer, Creo Inc. Norman B. Francis, Chairman, Pivotal Corporation Amos Michelson, Chief Executive Officer, Creo Inc. Kenneth A. Spencer, Corporate Director Morgan Sturdy, Corporate Director Creo Key Management Team Amos Michelson, Chief Executive Officer Dan Gelbart, President & Chief Technology Officer Mark Dance, Chief Financial Officer and Chief Operating Officer Judi Hess, President, Graphic Arts Printcafe’s Board of Directors Marc D. Olin, President, Chief Executive Officer, and Director Amos Michelson, Chairman of the Board Charles J. Billerbeck, Director Victor A. Cohn, Director Thomas J. Gill, Director Judi Hess, Director Geraldine B. Sinclair, Director It is unclear what role Ms. Hess and Mr. Michelson will play in the upcoming decisions made by Printcafe. We hope to have more information soon. Who Holds Printcafe Stock? Printcafe has 10.63 million shares outstanding. Creo has a 30.2% stake in Printcafe. Yesterday’s announcement adds 2.6 million shares to Creo’s holdings, and will bring the company’s ownership interest in Printcafe to approximately 55 percent. Was Printcafe prescient? In Printcafe’s S1-A dated June 3, 2002, the company included the following paragraphs describing certain risks that could affect the value of Printcafe stock in the future. “CREO COULD SUBSTANTIALLY INFLUENCE CORPORATE ACTIONS THAT CONFLICT WITH THE INTERESTS OF OUR PUBLIC STOCKHOLDERS. “Creo Inc. is our largest stockholder, has two representatives on our board of directors, and is a party to several commercial agreements with us. “After this offering, Creo, through its wholly-owned subsidiary, Creo SRL, is expected to beneficially own 3,204,083 shares of our common stock (including 370,000 shares that Creo has indicated an interest in purchasing in this offering), which will represent 30.2% of the voting power of our common stock immediately after this offering. In addition, the two members of our board of directors appointed by Creo, Amos Michelson, chairman of our board of directors, and Judi Hess, are employees of Creo. Creo could use its stock ownership or representation on our board of directors to substantially influence corporate actions that conflict with the interests of our public stockholders, such as: * approving or defeating mergers or takeover attempts; * changing the size and composition of our board of directors and committees of our board of directors; * causing us to issue or dispose of securities; * amending our governing documents; * determining the amount and timing of any dividends paid to holders of our common stock; and * otherwise controlling the outcome of stockholder votes.” An Interesting Item… On November 14, 2002, Creo announced its board of directors adopted a shareholder rights plan. The plan will provide the Creo board of directors and shareholders with more time to fully consider any unsolicited take-over bid. It will also provide the board with more time to pursue, if appropriate, other alternatives to maximize shareholder value. Printcafe has no such shareholder rights plan. Printcafe’s “Official” Relationship with Creo From Printcafe’s web site: “Creo originally invested in Printcafe in February 2000, and has continued to increase its holdings, most recently committing $23.6 million in the form of long-term debt in January 2002. Printcafe services are also sold through the Creo direct sales force. By partnering with Printcafe, Creo can offer total Internet-based commerce and supply-chain solutions for the printing and publishing industry. The Printcafe solution provides economic benefit to Creo customers by enabling full digital integration of business and print-production systems.” Early Indications: Printcafe executives declined to comment saying further information would be available soon. We expect the process to take several weeks for the two companies to sort out the logistics. People we spoke with indicate that Printcafe would most likely operate like ScenicSoft - an independent company doing the same activities as before with back-end development to further Creo’s goals in all things workflow. The inbred nature of Creo’s relationship with Printcafe can be somewhat confusing in terms of determining what the bottom line is from an investor’s point of view. Creo said in their release that they had “agreements” to acquire the additional shares to reach 55% ownership. So even though Creo has not formally consummated those deals to make them the majority owner, it is certainly a smart strategy to fend off potential bidders. Due to the timing of filing this report, we were unable to confirm whether the investors who agreed to tender their shares to Creo knew of Creo’s ultimate goal of proceeding with acquiring the entire company. Either way, the publicity of Creo’s intent could generate interest among other potential suitors or the consideration by Printcafe’s Board of other possible options. In effect, Printcafe was put together during the roaring dot com days which speaks for itself. The software is good and as Steven Schnoll communicated in his review of Printcafe’s 2002 users conference: Printers really don’t care as long as their software works. If Creo continues to innovate and integrate with all the technology they will soon possibly own, Creo’s customers will be some of the most advanced printers in the world. Of course Heidelberg, KPG, Fuji, Agfa and others will certainly shift into higher gear too. This one is far from over. We’ll have much more on this later. Stay tuned.