PRESS RELEASE: Corel Corporation and Microsoft Corporation
(NASDAQ: MSFT) today announced that they have formed a strategic
alliance that will see the two companies expand their relationship
to encompass projects related to Microsoft’s new .NET
initiative.
As part of this expanded relationship, Microsoft has purchased
24 million non-voting convertible preferred shares at a purchase
price of U.S.$5.625 per share or a total purchase price of U.S.
$135 million. The companies will also work together to support the
development, testing and marketing of new products related to the
.NET platform. Joint-marketing initiatives will include
participation in product launches and trade show events and
representation on mutual Web sites. In addition, both companies
have agreed to settle certain legal issues between Corel and
Microsoft.
“We are pleased to announce this latest development in our
relationship with Microsoft, and what we believe to be an important
step forward in our strategy for long-term growth,” said Corel’s
interim President and CEO Derek J. Burney.
“Corel has long recognized the potential of the Internet to
speed up the delivery of applications and services to our customers
worldwide,” added Mr. Burney. “Our most recent work has focused on
strategies to move our applications, including CorelDRAW and
WordPerfect as well as our Linux distribution – Corel LINUX OS, on
to the Web. By leveraging Corel’s development expertise and popular
product line with Microsoft’s .NET platform, we believe we have
found a great combination to accelerate this process. .NET promises
to be a robust platform that we can use to build innovative,
easy-to-use and reliable Web applications and services that will
benefit our customers.”
“Microsoft is very excited to see strong commitment from Corel
for the .NET platform. Corel has some of the best-known software on
the market and expertise in online-service delivery, graphics and
interface design. Coupled with Microsoft’s .NET initiative, our
companies will be able to cooperate on projects that will benefit
customers worldwide,” said Yuval Neeman, Vice President,
Microsoft?s Developer Division.
While neither Microsoft nor any of its affiliates are entitled
to convert the preferred shares, they will be saleable to, and
convertible by other parties, into an aggregate of 24 million
common shares of Corel. Based on the number of shares currently
outstanding, the common shares issuable upon conversion of the
preferred shares would represent approximately 24.6 per cent of the
outstanding Corel common shares after the conversion. The preferred
shares do not carry any preferential dividends over the common
shares.