Microsoft sells Softimage to Avid Technology

Reversing its longtime habit of snapping up small companies, Microsoft has thrown one back, selling 3-D animation technology subsidiary Softimage to Avid Technologies in a $US285 million deal. The sale, which Microsoft officials say is the company's first major divestiture, will still make Microsoft a $155 million profit on the price it paid for SoftImage in 1994.

Reversing its habit of snapping up small companies, Microsoft has thrown one back , selling 3-D animation technology subsidiary Softimage to Avid Technologies in a US$285 million deal.

The acquisition, along with an alliance with Microsoft, will boost Avid's fortunes in the television finishing and 3-D animation markets, said William J. Miller, chairman and CEO of Avid.

"Both Avid and Softimage have independently recognised the need for integrated nonlinear solutions, and have shared a common goal to provide editors and artists with the creative freedom necessary for television finishing and special effects that can only be achieved with digital technology," Miller said.

The deal includes $79 million in cash, with the remainder in equity and options, and Microsoft will retain an approximately 9 to 10% stake in Avid. Microsoft acquired Softimage in June of 1994 for $130 million.

"This is a first divestiture, if you will, or sale of any part of Microsoft that I am aware of," said Craig Mundie, Microsoft's senior vice president of consumer platforms. "Certainly it's the first of any substance."

Avid, which builds video, film, and audio solutions for entertainment and information applications, covets Softimage's Digital Studio technology, which is used for finishing short-form television projects, such as commercials and music videos.

Officials said Softimage, which has some 300 employees worldwide, would be reorganised.

Avid Technologies Inc., in Tewksbury, Massachusetts, is at http://www.avid.com/. Microsoft Corp., in Redmond, Washington, is at http://www.microsoft.com/. Softimage Inc., in Montreal, is at http://www.softimage.com/.

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