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Monotype Imaging Holdings Inc. a leading global provider of text imaging solutions, today announced it has completed its acquisition of Bitstream Inc.'s font business in an all cash merger valued at approximately $50 million, subject to adjustments based on the closing net asset value of the company.
"This is a great day in our history," said Doug Shaw, president and chief executive officer of Monotype Imaging. "Our mission is to be the first place to turn for typefaces, technology and expertise that enable the best user experience and ensure brand integrity regardless of device, platform or language. We're excited to welcome Bitstream's team of experts to Monotype Imaging — professionals who care as passionately about type as we do."
Monotype Imaging's global reach and financial strength, combined with Bitstream's strong online font store and OEM business, position Monotype Imaging to serve broader markets, while addressing a wider range of customer needs. The acquisition is expected to strengthen Monotype Imaging's products and services, while providing customers with improved choice and flexibility.
Included in the acquisition is the popular MyFonts.com(sm) website, featuring 89,000 fonts from nearly 900 foundries, in addition to the widely used WhatTheFont(sm) identification service. The transaction also includes the Bitstream® typeface library, the company's Font Fusion® and Bitstream Panorama™ font rendering and layout technologies, a range of fonts for embedded and mobile environments, and 10 patents. Thirteen employees from Bitstream's U.S. operations, in addition to 42 Bitstream engineers and type designers who work in Noida, India, are joining Monotype Imaging, providing the company with an expanded global presence.
Expected financial impact from the acquisition of Bitstream's font business
Based on the timing of the close of the acquisition of Bitstream's font business, Monotype Imaging expects the financial impact to be immaterial to the first quarter of 2012 and is reiterating the financial guidance that was provided on Feb. 16, 2012. For the first quarter, the company continues to expect revenue in the range of $32.5 million to $34.0 million, non-GAAP net adjusted EBITDA in the range of $13.5 million to $14.5 million, GAAP earnings per diluted share in the range of $0.15 to $0.17 and non-GAAP earnings per diluted share in the range of $0.21 to $0.23.
For the full year 2012, Monotype Imaging expects Bitstream's font business to contribute approximately $13.0 million to $14.0 million in revenue and $2.0 million to $3.0 million in net adjusted EBITDA. The full year 2012 impact from the Bitstream acquisition includes the purchase accounting write-down of deferred revenue, the alignment of Bitstream's revenue recognition policies with Monotype Imaging's policies and integration costs. Total revenue is now expected to be in the range of $146.0 million to $151.0 million, up from prior guidance of $133.0 million to $137.0 million. Net adjusted EBITDA is now expected to be in the range of $59.0 million to $63.0 million, up from prior guidance of $57.0 million to $60.0 million. The acquisition is expected to be neutral to GAAP earnings per diluted share in the range of $0.68 to $0.73, and non-GAAP earnings per diluted share is now expected to be in the range of $0.96 to $1.01, up from prior guidance of $0.93 to $0.98.
A reconciliation of GAAP measures to non-GAAP measures for the three months ended March 31, 2012 and the full year 2012 is provided in the financial tables that accompany this release.
Conference call details
Monotype Imaging will host a conference call for financial analysts and shareholders tomorrow, March 20, 2012, at 8:00 a.m. EDT to discuss the company's acquisition of Bitstream's font business. Individuals who are interested in listening to the audio webcast should go to the Investor Relations portion of the About Us section of Monotype Imaging's website at www.monotypeimaging.com. The live call can also be accessed by dialing 1-866-225-8754 (domestic) or 1-480-629-9818 (international) using passcode 4525767. If individuals are unable to listen to the live call, the audio webcast will be archived in the Investor Relations portion of the company's website for one year.
This press release contains certain forward-looking statements about Monotype Imaging, including statements that involve risks and uncertainties concerning Monotype Imaging's operation of Bitstream's business after the acquisition. Actual events or results may differ materially from those described, expressed or implied in this press release due to a number of risks and uncertainties, many of which are beyond the control of Monotype Imaging. The potential risks and uncertainties include, among others, risks related to our ability to integrate the Bitstream business with Monotype Imaging's business, the possibility that the financial performance of the business will fail to meet expectations, general economic conditions, industry specific conditions and the possibility that Monotype Imaging may be adversely affected by other economic, business or competitive factors. In addition, information is available in the documents that Monotype Imaging and Bitstream, respectively, file with the SEC on Forms 10-K, 10-Q and 8-K. These filings identify and address other important factors that could cause Monotype Imaging's financial and operational results to differ materially from those contained in the forward-looking statements set forth in this document. Accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations or the financial condition of Monotype Imaging. The company is under no duty to update any of the forward-looking statements after the date of this press release to conform to actual results.
About Monotype Imaging
Monotype Imaging combines technology with design to help the world communicate. Based in Woburn, Mass. with offices in the U.S., Europe and Asia, Monotype Imaging brings text imaging and graphical user interface capabilities to consumer electronics devices such as laser printers, copiers, mobile phones, e-book readers, tablets, automotive displays, digital cameras, navigation devices, digital televisions, set-top boxes and consumer appliances. The company also provides printer drivers, page description language interpreters, printer user interface technology and color imaging solutions to printer manufacturers and OEMs (original equipment manufacturers). Monotype Imaging technologies are combined with access to more than 15,000 typefaces from the Monotype®, Linotype® and ITC® typeface libraries — home to some of the world's most widely used designs, including the Times New Roman®, Helvetica®, Frutiger® and ITC Franklin Gothic™ typefaces. Fonts are licensed to creative, business and Web professionals through e-commerce portals, direct and indirect sales and custom design services. Monotype Imaging offers industry-standard font solutions that support all of the world's major languages. Information about Monotype Imaging can be found at www.monotypeimaging.com.
Monotype is a trademark of Monotype Imaging Inc. registered in the U.S. Patent and Trademark Office and may be registered in certain jurisdictions. Times New Roman is a trademark of The Monotype Corp. registered in the U.S. Patent and Trademark Office and may be registered in certain jurisdictions. Linotype is a trademark of Linotype GmbH registered in the U.S. Patent and Trademark Office and may be registered in certain jurisdictions. Helvetica and Frutiger are trademarks of Linotype Corp. registered in the U.S. Patent and Trademark Office and may be registered in certain jurisdictions in the name of Linotype Corp. or its licensee Linotype GmbH. ITC is a trademark of International Typeface Corp. registered in the U.S. Patent and Trademark Office and may be registered in certain jurisdictions. ITC Franklin Gothic is a trademark of International Typeface Corp. and may be registered in certain jurisdictions. Font Fusion, Pageflex and BOLT are either registered trademarks or trademarks of Marlborough Software Development Holdings Inc. Bitstream, WhatTheFont and Panorama are registered trademarks or trademarks of Bitstream Inc. MyFonts and MyFonts.com are registered service marks of Bitstream Inc. All other trademarks are the property of their respective owners. ©2012 Monotype Imaging Holdings Inc. All rights reserved.