Sage to Acquire Faroudja

Last week, Sage (a supplier of digital display processors) and Faroudja (a developer of video processing technologies) announced that they have signed a definitive agreement for Faroudja to merge into a wholly owned subsidiary of Sage in a stock-for-stock transaction. The stockholders of Faroudja will receive approximately 3.9 million shares of Sage common stock, valued at approximately $155 million. The transaction, which will be accounted for as a purchase by Sage, has been unanimously approved by the boards of directors of both companies and is expected to close in the quarter ending June 30, 2000, subject to approval by each company's shareholders.

Sage's Chandra Reddy states that "this is a highly strategic acquisition for Sage. We will continue to operate the Faroudja home theater and broadcast businesses as separate units in the same manner as our traditional systems business. However, we plan to combine our semiconductor interests to form a single business group focused on providing a full range of breakthrough video solutions to the world's leading display manufacturers."

Commenting on the deal, Faroudja's Tom Harvey explains that "this merger is about growth, not cost cutting. It's about combining two good companies to make a bigger, stronger company, and building the foundation for an even more successful company capable of achieving growth in important new markets. By combining Sage's proven track record of execution and growth with Faroudja's acclaimed video-processing technologies and patent portfolio, the new company will be positioned to move quickly and effectively in a variety of existing and new markets, including flat-panel displays, video projectors, DVD players, TVs, and home theater systems. The company will be able to bring new, high-value products to market faster, at 'Internet time' speeds."

Glenn W. Marschel, also of Faroudja, will be joining the Sage Board at the closing of the transaction. He adds that "Sage has proven to be the pace-setter in achieving rapid time-to-market for digital display processors, and we believe that together we can rapidly deliver a superset of imaging and video functionality in a single-chip design. Sage has already developed a strong distribution and customer support network for these chip products."