SAN JOSE, Calif.Sept. 28, 2001--Genesis Microchip Inc. (NASDAQ: GNSS) and Sage, Inc. (NASDAQ: SAGI) announced today a definitive agreement under which Genesis will acquire Sage for approximately $241 million in stock. The combination creates a technology leader with a strong history of innovation and a broad portfolio of products serving the fast-growing display semiconductor industry. Under the terms of the agreement, Genesis will issue 0.571 shares for each outstanding Sage share. Following the acquisition, former Sage share and option holders will own approximately 28% of the combined company on a fully diluted basis.
Including synergies and excluding one-time charges, the transaction is expected to be accretive to Genesis's earnings per share commencing in the first full quarter of combined operations. Genesis anticipates that the combination will yield significant operational synergies and cost savings from efficiencies in purchasing, manufacturing, sales and administration. Additionally, the combination will provide a strong platform for Genesis to pursue complementary high-growth opportunities in the display semiconductor industry. The transaction significantly expands Genesis's global reach, with the combined company having significant research and development, service and support operations in Canada, the United States, India, Korea, Taiwan and China.
"The strategic merits of this combination are compelling," said Amnon Fisher, Genesis's Chief Executive Officer. "Together, we plan to leverage the complementary technology portfolios of our two organizations to provide unique solutions to better meet the needs of our customers. In addition, this acquisition allows Genesis to accelerate its growth in consumer video ICs by capitalizing on Sage's technological capabilities and the Faroudja brand name."
Five members of the current Genesis Board of Directors and two members of the Sage Board of Directors will join to form a seven-member Board of Directors. Chandra Reddy, Sage's CEO, will join Genesis's board as Vice Chairman, with an active role in day-to-day management as Executive Vice President of Engineering.
Sage Chief Executive Officer Chandra Reddy said, "This combination will allow us to build on our strong engineering heritage. With nearly 200 engineers, the combined company will have the critical R&D mass to aggressively pursue future opportunities."
In conjunction with the transaction, Genesis will change its legal domicile to the United States. The transaction is expected to be tax-free for U.S. federal income tax purposes. The transaction will be subject to regulatory and shareholder approvals, the completion of Genesis's change of its legal domicile to the United States and customary closing conditions, and is expected to close in early calendar 2002.
Genesis Microchip was advised in the transaction by Dresdner Kleinwort Wasserstein. Sage was advised in the transaction by U.S. Bancorp Piper Jaffray.
"The combined entity is designed to build on the already strong momentum at both companies," concluded Amnon Fisher. "We believe we will be better positioned to satisfy our customers' needs, operate more efficiently and generate new product opportunities within the display IC market."
About Genesis Microchip
Genesis Microchip is a leading supplier of cost-effective integrated circuits and software solutions, enabling the convergence of Internet information and video. Flat-panel displays, digital televisions, digital CRTs and consumer video products all benefit from Genesis technology, which connects and formats any kind of source content to be displayed with the highest image quality on any type of display. "Genesis Display Perfection" components are used by all leading brand-name monitor vendors. Founded in 1987, Genesis has offices in Silicon Valley, California; Taipei, Taiwan and Toronto, Canada. Further information is available at www.genesis-microchip.com.
About Sage
Headquartered in Milpitas, Calif., Sage, Inc. is a leading provider of digital display processors, enabling superior picture quality for a variety of consumer technology and PC-display products ranging from web appliances to TVs and flat panel monitors. Leveraging Emmy-award winning Faroudja technology from its acquisition of Faroudja, Inc., Sage is developing products that bring the home theater experience to the mass consumer and PC-display market through digitally enhanced television, projection displays, DVD players and internet appliances. The Company's systems-on-a-chip technology provides highly integrated mixed signal and system functionality with higher picture quality than lower-quality processors at a similar component cost. More information about Sage can be found on its web site at www.sageinc.com.