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Monotype acquires Bitstream

November, 10, 2011. Reproducing this important news release in its entirety, because it is so important.

Monotype Imaging Holdings Inc. (Nasdaq: TYPE) and Bitstream Inc. (Nasdaq: BITS) today announced they have entered into a definitive agreement for Monotype Imaging to acquire Bitstream's font business in an all cash merger valued at $50 million, subject to adjustments based on the closing net asset value of Bitstream. The transaction has been approved by the boards of directors for both companies.

Monotype Imaging intends to acquire Bitstream's popular MyFonts.comsm website, featuring 89,000 fonts from nearly 900 foundries, and Bitstream's widely used WhatTheFont identification service. The transaction will also include 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. Approximately 15 employees from Bitstream's U.S. operations, based in Marlborough, Mass., are expected to join Monotype Imaging, in addition to approximately 40 engineers and type designers who work at Bitstream's development facility in Noida, India.

The combination of Monotype Imaging's global reach and financial strength with Bitstream's renowned e-commerce site and OEM business is expected to enable Monotype Imaging to serve a broader set of markets, while delivering high-quality user experiences on any publishing medium, platform or device.

"This is an important milestone in our history, as we combine two entities that care passionately about type," said Doug Shaw, president and chief executive officer at Monotype Imaging. "The acquisition fits squarely in our stated strategy of expanding IP, growing our customer base, capturing emerging opportunities, and increasing momentum in our growth businesses. Bitstream will bring a strong e-commerce business and a thriving online community that is highly complementary to our strength in serving corporations and brands. We'll also gain an expanded OEM customer base for our Display Imaging business, operations in India, and a team of highly respected type experts to add to our own."

"This is a historic marriage," said John Collins, vice president and chief technology officer at Bitstream. "Combining MyFonts' success in bringing together cutting-edge type designs from 21st century designers with Monotype Imaging's huge library of classic typefaces and top-notch design expertise sets up for a strong, exciting future for type."

Based on information disclosed in Bitstream's filings, Monotype Imaging estimates that the portion of the business the company will be acquiring had font-related revenue of approximately $17.0 million in 2010. Upon closing, Monotype Imaging anticipates that the majority of revenue will be included in the company's Creative Professional business. The acquisition is expected to be accretive to net adjusted EBITDA and non-GAAP earnings per share, including the impact of non-recurring merger-related costs within the first year of closing.

The transaction is expected to close at the end of the first quarter of 2012, pending the satisfaction of customary closing conditions, the approval of Bitstream's shareholders, and the spinoff by Bitstream of its mobile browsing and variable data publishing businesses into a new, standalone company. Monotype Imaging anticipates financing the deal through a combination of cash balances and the company's secured revolving credit facility.

Monotype acquires Bitstream
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Luc Devroye ⦿ School of Computer Science ⦿ McGill University Montreal, Canada H3A 2K6 ⦿ lucdevroye@gmail.com ⦿ http://luc.devroye.org ⦿ http://luc.devroye.org/fonts.html