The terms of the deal stipulates that Roxio – makers of Toast CD-burning software – will acquire all of MGI Software's outstanding shares. The combined companies will result in one of the world's largest consumer digital-media software companies, according to Roxio.
Approximately 2.3 million shares of Roxio stock will be issued to stockholders of MGI at the close of the transaction, yielding an approximate exchange ratio of 0.05269 shares of Roxio for each share of MGI.
This represents a purchase price of about $32.8 million based on Roxio's closing price and the exchange rate on December 3, 2001.
The transaction is subject to approval by MGI shareholders. The deal is expected to close within 90 days. Both companies' boards of directors have voted unanimously in favour of the transaction.
Roxio's president and CEO Chris Gorog said: "This transaction is highly synergistic from both a product portfolio and marketing and distribution standpoint. It provides significant leverage in advancing Roxio's vision as the leader in digital-media software."