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NVIDIA To acquire 3dfx core graphics assets
SANTA CLARA, CA - DECEMBER 15, 2000 - NVIDIA®
Corporation (Nasdaq: NVDA)
today announced that it has signed a definitive
agreement to acquire certain
graphics related assets of 3dfx Interactive (Nasdaq:
TDFX), a pioneer and a
recognized leader in graphics technology. These
graphics related assets
include, but are not limited to, patents, pending
patent applications,
trademarks, brand names, and chip inventory
related to the graphics business
of 3dfx. In addition, 3dfx and NVIDIA have agreed
to stay the patent
infringement litigation between them through the
closing of the transaction,
at which time it will be jointly dismissed with
prejudice.
Under the terms of the agreement, NVIDIA will pay
to 3dfx a total
consideration of $70 million in cash and 1
million shares of common stock.
The asset acquisition has been approved by the
board of directors of each
company and is subject to 3dfx shareholder
approval, the satisfaction of
regulatory requirements and other customary
closing conditions. This
acquisition will be accounted for as a purchase
and is expected to be
complete in the first quarter of NVIDIA's fiscal
year 2002.
Founded in 1994, 3dfx was an early pioneer in the
3D graphics industry and
has been recognized for its ability to bring some
of the world's finest
games, educational content, interactive
entertainment and media-rich
business applications to life
NVIDIA executives will conduct a conference call
on Monday, December 18,
2000 at 7:00AM, Pacific Time. The conference
call number is 212-231-6017,
reservation number 17310062. A recorded playback
of the conference call will
be available through Wednesday, December 20, 2000.
The call-in number for
the replay is 800-633-8284 (US), 858-812-6440
(International), (passcode:
17310062). A live webcast (listen-only mode)
of the conference call will be
available at http://www.nvidia.com/Company/InvestorRelations;
at
http://www.streetevents.com;
and at http://www.bestcalls.com.
You must have
a compatible media player installed on your
computer in order to listen to
the webcast. You may download a media player for
free at the sites listed
above.
About NVIDIA
NVIDIA Corporation (Nasdaq: NVDA), based in Santa
Clara, California., is the
global leader in advanced graphics and multimedia
processing technology for
the consumer and professional computing markets.
Its 2D, 3D, video and
multimedia capabilities make NVIDIA one of the
premier semiconductor
companies in the world. NVIDIA offers a wide range
of products and services,
delivering superior performance and crisp visual
quality for PC-based
applications such as manufacturing, science,
e-business, entertainment, and
education.
This news release contains forward-looking
statements that involve risks and
uncertainties that could cause actual results or
outcomes to differ
materially from those contemplated by the
forward-looking statements.
Factors that could cause or contribute to such
differences include, but are
not limited to, risks relating to the completion
of the contemplated
transaction, including the risk that required
regulatory clearances or
shareholder approval might not be obtained in a
timely manner or at all. In
addition, statements in this press release
relating to the expected benefits
of the contemplated transaction are subject to
risks relating to the timing
and successful completion of technology and
product development efforts,
integration of the technologies and assets of
NVIDIA Corporation and 3dfx
Interactive, unanticipated expenditures, changing
relationships with
customers, suppliers and strategic partners and
other factors described in
the most recent Form 10-Q, most recent Form 10-K
and other periodic reports
filed by NVIDIA and 3dfx, with the Securities and
Exchange Commission.
Additional Information and Where to find It
NVIDIA plans to file a Registration Statement on
SEC Form S-4 in connection
with the transaction, and NVIDIA and 3dfx expects
to mail a Proxy
Statement/Prospectus to shareholders of 3dfx
containing information about
the transaction. Investors and security
holders are urged to read the
Registration Statement and the Proxy
Statement/Prospectus carefully when
they are available. The Registration
Statement and the Proxy
Statement/Prospectus will contain important
information about NVIDIA, 3dfx,
the transaction and related matters.
Investors and security holders will be
able to obtain free copies of these documents
through the website maintained
by the U.S. Securities and Exchange Commission at http://www.sec.gov.
Free
copies of the Proxy Statement/Prospectus and these
other documents may also
be obtained from NVIDIA by directing a request
through the Investors
Relations portion of NVIDIA's website at http://www.nvidia.com
or by mail to
NVIDIA, 3535 Monroe Street, Santa Clara, CA 95051,
attention: Investor
Relations, telephone: (408) 615-2500.
In addition to the Registration Statement and the
Proxy
Statement/Prospectus, NVIDIA and 3dfx file annual,
quarterly and special
reports, proxy statements and other information
with the Securities and
Exchange Commission. You may read and copy
any reports, statements or other
information filed by NVIDIA or 3dfx at the SEC
public reference rooms at 450
Fifth Street, N.W., Washington, D.C. 20549 or at
any of the Commission's
other public reference rooms in New York, New York
and Chicago, Illinois.
Please call the Commission at 1-800-SEC-0330 for
further information on the
public reference rooms. NVIDIA's and 3dfx's
filings with the Commission are
also available to the public from commercial
document-retrieval services and
at the website maintained by the Commission at http://www.sec.gov.
The directors and executive officers of NVIDIA and
3dfx have interests in
the transaction, some of which may differ from, or
may be in addition to,
those of 3dfx's shareholders generally. A
description of the interests that
NVIDIA's and 3dfx's directors and executive
officers have in the transaction
will be available in the Proxy
Statement/Prospectus. 3dfx will be and
certain of its directors, executive officers and
other members of 3dfx's
management and employees may be soliciting proxies
from 3dfx shareholders in
favor of the transaction. The directors and
officers of NVIDIA may be
deemed to be participants in 3dfx's solicitation
of proxies. Information
concerning the participants will be set forth in
the Proxy
Statement/Prospectus when its filed with the
Securities and Exchange
Commission.
# # #
Registered trademark NVIDIA® Corporation, 2000.
All company and/or product
names are trademarks and/or registered trademarks
of their respective
manufacturers. Features, pricing, availability and
specifications are
subject to change without notice.
Note to editors: If you are interested in viewing
additional information on
NVIDIA, please visit the NVIDIA Web page at <http://www.nvidia.com/News.nsf>
on NVIDIA's corporate information pages.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Press
Release 15 December, 2000 - 3dfx Announces Three
Major Initiatives To Protect Creditors and
Maximize Shareholder Value
Board
of Directors Initiates Cost-Cutting Measures,
Recommends To Shareholders Sale of Company Assets
to NVIDIA Corporation for $112 million and
Dissolution of Company
For
Immediate Release
San
Jose, Calif., December 15, 2000 - In an effort
to protect its creditors and maximize shareholder
value, 3dfx Interactive, Inc. (Nasdaq: TDFX -
news) announced today that it will substantially
reduce all of its workforce as part of an
initiative to significantly reduce expenses. In
addition, the company said its Board of Directors
will recommend to its shareholders that they
approve the sale of most of the company's assets
to NVIDIA
Corporation (Nasdaq: NVDA- news) as outlined
in a definitive agreement between the companies
that was signed today, and also approve a plan to
dissolve the company following completion of the
asset sale.
"After
aggressively pursuing a wide range of options that
take into consideration the interests of our
creditors, our shareholders, our employees and our
customers," said Alex Leupp, president and
CEO, 3dfx Interactive Inc., "we strongly
believe that to reduce expenses, sell our assets
and dissolve the company provides the highest
return to our creditors, shareholders, and
employees."
"We
expect that the combined technologies of 3dfx and
NVIDIA will continue the legacy that 3dfx began in
1994, " Leupp continued. "NVIDIA is the
number one supplier of graphics technology to the
OEM market. With the addition of 3dfx's
high-quality technology that leads the retail
market, we believe the combination of the two will
result in even greater PC graphics
leadership."
The
target market for 3dfx has historically been the
retail graphics market, a market that 3dfx has
dominated since 1998. The segment represents
approximately 10 percent of the overall graphics
market, and is subject to extreme volatility and
unpredictability. Specifically, high inventory
expenses, decreasing margins, and slowing demand
have done irreparable harm to 3dfx. While the
company had recently announced plans to expand its
business into additional markets, it has been
unable to invest in its expansion under current
business and financial market conditions.
The
company announced that it plans to substantially
reduce its costs in order to best conserve its
resources. These cost-cutting measures include a
reduction of substantially all of the company's
workforce by early next year, reduction in office
space, and other efforts to reduce non-essential
expenses. 3dfx is also providing manufacturing
services to third parties to help cover the
overhead associated with its Juarez, Mexico
manufacturing facility pending the sale of that
facility. In the meantime, 3dfx expects to
continue to maintain an adequate workforce to
support its customers.
The
Board of Directors, with the assistance of the
company's advisors, has undergone exhaustive
efforts to explore many alternatives including
raising new financing to continue its operations
and exploring various strategic alliances and
business combinations. It has concluded that the
best interests of the creditors and shareholders
will be served by selling its assets to NVIDIA
Corporation, as outlined in a definitive agreement
between the companies signed today, and also to
approve the plan for dissolution.
Under
the terms of the agreement signed today, NVIDIA
has agreed to pay a value of $112 million ($70
million cash and one million shares of registered
NVIDIA common stock as value based on NVIDIA's
closing price on December 14, 2000).
Upon
signing the definitive agreement, NVIDIA has
agreed to loan to 3dfx $15 million for working
capital, which will be credited to the cash
portion of the purchase price. In addition, 3dfx
and NVIDIA have agreed to stay the patent
infringement litigation between them through
closing of the transaction, at which time the
suits will be jointly dismissed with prejudice.
Assets included in the transaction include all
3dfx intellectual property and chip inventory as
well as certain other assets. In addition, upon
signing the definitive agreement, 3dfx transferred
to NVIDIA the "3dfx" and
"Voodoo" brand names and trademarks.
The
closing of the transaction is subject to a variety
of conditions, including 3dfx shareholder
approval, receipt of governmental approvals
including the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, and receipt of all
necessary consents of third parties. After closing
the NVIDIA asset sale and upon 3dfx shareholder
approval, 3dfx will proceed to pay or adequately
provide for its debts and liabilities. 3dfx will
thereafter distribute its remaining assets to its
shareholders in one or more distributions.
3dfx
will host a conference call today at 2 p.m.
Pacific Standard Time, 3 p.m. Mountain, 4 p.m.
Central, 5 p.m. Eastern, to discuss current
developments and its financial results for the
third quarter fiscal 2001, ended October 31, 2000.
To participate in the conference call, please dial
800-521-5428. .
About
3dfx Interactive
3dfx
Interactive is a global leader in enabling the
emerging age of visual communications, and the 3D
multimedia revolution in personal computers and
consumer products. With its patented and
award-winning graphics accelerator chips, boards
and software, 3dfx provides the technology to
create high-impact visual experiences. The company
is recognized worldwide for its ability to bring
the world's finest games, educational content,
interactive entertainment and media-rich business
applications to life. 3dfx products are available
in retail stores worldwide, and through leading PC
makers including Compaq, Dell, Falcon Northwest
and Micron. 3dfx has headquarters in San Jose,
Calif., with engineering and manufacturing
facilities in Richardson, Texas, Austin, Texas,
and Juarez, Mexico. The company also operates
www.3dfxgamers.com, the premier online community
for Voodoo owners and gaming enthusiasts. 3dfx
Interactive is available on the Web at http://www.3dfx.com.
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