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Creo Closes ScenicSoft Acquisition: Belgium & Washington Offices to Continue

Press release from the issuing company

VANCOUVER, British Columbia--Oct. 24, 2002--Creo Inc. today completed its previously announced acquisition of ScenicSoft, Inc., a privately held company located near Seattle, WA. ScenicSoft develops and markets software for the publishing and printing industries, and is a pioneer in developing digital prepress solutions. Creo has acquired all of the issued and outstanding shares of ScenicSoft for approximately US$9.5 million in a combination of cash, convertible notes and an assumption of liabilities. ScenicSoft will become a wholly-owned subsidiary of Creo Inc. The acquisition is expected to be accretive to Creo's adjusted earnings per share in its first year of operations. "ScenicSoft's production planning software is a natural complement to Creo's range of products. Preps, the industry's leading page imposition software, is already an important element in Creo workflow systems sold today," stated Amos Michelson, chief executive officer of Creo. "The integration of the Pandora application into the Creo family of packaging workflow solutions reinforces our commitment to become the leading supplier of prepress systems for packaging printers. The UpFront product will allow us to automate print production at every stage of prepress, press, and postpress. With these innovative new products, the Networked Graphic Production initiative from Creo will deliver even more value as printers' operations become increasingly automated." In addition to its headquarters in Lynnwood, WA near Seattle, ScenicSoft operates a development and support center in Turnhout, Belgium. Both facilities will continue operations under Creo. In an effort to optimize the existing Creo infrastructure, some consolidation - mostly associated with the Lynnwood office - will occur over the next three to six months. "Customers will continue to receive the high level of support they have previously enjoyed for Preps and other ScenicSoft products. We expect the alignment of the two organizations to be fast and efficient, aided by the companies' long, successful history together," stated Bob Kutschke, director of the Creo production planning software group and responsible for the ongoing success of the ScenicSoft product line. "In addition to our geographic proximity, the similarity of our cultures and operating principles will support a smooth integration. We look forward to bringing the two teams together and enhancing the success of the full range of production planning products." ScenicSoft shareholders unanimously approved the proposed transaction at its shareholders meeting of September 23, 2002. Of the aggregate US$9.5 million to be paid by Creo, US$4.0 million is payable by Creo one year after the close of the transaction and is represented by unsecured, non-interest bearing, convertible promissory notes of Creo. Creo may convert these notes into common shares at an average closing price of Creo common shares for the ten days prior to the one-year anniversary of the closing of the transaction.