Leitch Announces Inscriber Acquisition

Reprinted from a Leitch press release:

Leitch Technology Corporation (TSX:LTV), a leading supplier of high-performance video systems for the professional television industry, announced today it has entered into a definitive agreement to acquire Inscriber Technology Corporation, based in Waterloo, Ontario. Inscriber is a privately held video software company that develops SD (Standard Definition) and HD (High Definition) television graphics and digital signage products for the broadcast and video post-production markets. The companies expect to close the transaction in early January 2005, subject to the satisfaction of customary closing conditions and regulatory approvals. The total purchase price is $18 million Cdn, including the assumption of $1.5 million in debt. The purchase will be funded through Leitch’s existing cash balances. Inscriber extends Leitch’s position in the market with a complementary product range focused on broadcast graphics, content branding and logo generation, enabling an Integrated Content Environment (ICE) that will streamline workflow for broadcast and media companies, the customer base currently served by both companies.

“Our customers will benefit from an extensive range of products that are complementary to our existing Leitch offering,” said Tim Thorsteinson, president and CEO of Leitch Technology. “This acquisition is one more step in our commitment to focus on broadcast television customers – providing them with technologically advanced, comprehensive television equipment solutions with premium service. Inscriber’s product line will add expansive software design capability that will allow us to leverage R&D resources from both companies and propagate further integration of hardware platforms with software.”

“Inscriber has a complementary customer base to Leitch and adds technical prowess in the graphics software domain that will only become stronger with this acquisition,” said Dan Mance, Inscriber president and founder. “With Leitch, we will continue our dedicated customer focus on solutions that are open and that help broadcasters and production facilities create leading-edge graphics and branding imagery. Our software leadership will be enhanced within the Leitch brand.”

Inscriber has been in business for nearly 20 years and has installations in over 110 countries. By combining Inscriber’s line of broadcast graphics systems, still and clip stores, media servers and digital signage solutions with Leitch’s content production, storage, processing, transmission, and Videotek test, measurement and monitoring products, Leitch will offer a comprehensive array of products, technologies and services for the television and emerging digital signage and display marketplace.

Inscriber is expected to contribute approximately $14 million Cdn in revenue annually, with gross margins over 60 percent. They are expected to contribute positive earnings and will continue to operate out of Waterloo, Ontario, just southwest of Leitch’s Toronto-based offices. Mance, Inscriber’s founder and president who is a respected industry veteran, will become the chief technical officer of Leitch. Randy Fowlie, currently the COO of Inscriber, will run the broadcast graphics product line within the Leitch organization.

Following the expected close of the transaction in early 2005, the two companies will maintain their presence at the largest annual industry trade show, the National Association of Broadcasters (NAB), in Las Vegas, April 18-21, 2005.

Leitch and Inscriber will be exhibiting their unique capability of meeting customers’ needs with a full range of HD products that provide the experience of an Integrated Content Environment – a streamlined workflow for the production, processing, transmission, management and storage of content – in the LVCC South Hall. Inscriber will show a full lineup of the latest HD additions to its Inca Studio character generators, Inca RTX real-time 2D/3D graphics platforms, Inca AutoCG networked graphics/automation and InfoCaster digital signage solutions.

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