NVIDIA buying 3dFX

[rstokc]

The press release:

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
SAN JOSE, Calif., Dec. 15 -- 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.

[MAC]

Damn, I just saw this too. Now, instead of seeing how the Rampage would compare to the NV20, I'm going to have to compare it (NV20) to the next version of the Radeon.

[Edited by MAC on 12-15-2000 at 05:55 PM]

[Solstice]

I just read the news. At first I thought it was a joke. I knew that 3dfx was having financial problems but I thought they were going to dip into their reserves to keep fighting the good fight. We (consumers) need the competition!!! Hopefully ATI will continue to push the market into making cheaper, and faster graphics chips.

[stall6g]

I think that almost every forum on this board has this posted. I know that I have seen at least 3 threads about it so evidently I am not the only person who thinks that this is hot news.

[Syn]

Looks like Nvidia has learned well from MS.We are witnessing the birth of a new monoploy.

Sad to see 3DFX go down like this.I'm sure we will feel this in our pocket.

[DirkBelig]

POST DELETED BY DIRKBELIG BECAUSE IT OFFENDED SOME SENSITIVE MEMBERS OF THIS FORUM.

[Edited by DirkBelig on 12-18-2000 at 05:48 PM]

[cobosdan]

Ahhh, yes, Dirk, crashing the wake!

Your brainy concepts leave so much to ponder, hmmmmm

Specially your "H" theme, so right, no danger of a monopoly here, cause Nvidia is all for consumer rights.

And your suscint "A" exposition, even if we have to pay more eventually, it's nothing compared to the joy of belonging to the Supreme Brand (a Nazy hymn here).

Rampage would have been a piece of garbage and not to par with N20, such impossibilities doesn't happen in the perfect Nvidia world.

You redeem my faith in human multiplicity: not matter how sad the news there is always someone to derive a simple, unhealthy, mean-spirited joy

Let me share with you, HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

Signed

Cobosdan
3dfx's widow

[DirkBelig]

POST DELETED BY DIRKBELIG BECAUSE IT OFFENDED SOME SENSITIVE MEMBERS OF THIS FORUM.

[Edited by DirkBelig on 12-18-2000 at 05:49 PM]

[tunis5000]

Where is the monopoly? Ever heard of ATI and Matrox? (among others)...

[cobosdan]

Dear Dirk,

I'm almost sure, you really care about this cards controversy, do you.

All this is a kind of game to me, beyond my preference for competition and sympathy for the underdog.

I think the 3dfx debacle really affects you more cause now you must find another brand to hate.

Which will you choose, ATI (the most menacing to Nvidia) or Matrox.

Or will you wait for them to really pose a threat to your substitute White Supremacy.

Why do you suppose I always draw you out?
I like the forum and its people but I also love comedy, and you are one of the finest comedians I know.

In the manner of the Buster Keaton's school of comedians that arouses compassion and tenderness in the onlooker.

Perhaps even more cause you are one totally unwittingly.

Cheers

[DirkBelig]

POST DELETED BY DIRKBELIG BECAUSE IT OFFENDED SOME SENSITIVE MEMBERS OF THIS FORUM.

[Edited by DirkBelig on 12-18-2000 at 05:49 PM]

[cobosdan]

Dirk, sit down, breath deeply, relax.

No one hates you.
You are safe.
You don't need to hate nobody and nothing.
Hating is bad for your health.
It gives halitosis and flatulences.
Now, that may be the cause of people hating you.
Warning, you are not safe, I repeat, you are NOT safe!!

[Mike89]

Cobosdan. Dam doode, you are reading too much Shakespeare or something man. Speak english!!

Pretend you're Dirk and let it out man!!!!!!!!!!!!!!!!!!

You won't heal until you come to terms with your crisis!

The NV20 will fix you up!! You will become a new and better man.

___________________________________________________________

Kudos to George W. Bush!!!! I'm a happy camper seeing this man as our US President!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Finally!!!!!!!!!!!!!

[Edited by Mike89 on 12-16-2000 at 02:24 AM]

[Zakar]

umm, dude, I think he was trying to prove a point Dirk is a dumb ass

[DragonMasterAlex]

Don't worry, guys, we live in a semi-free market, either ATI, Matrox or some other company we haven't heard of yet will spring up and give Nvidia a good challenge and keep the good fight. 3Dfx did a decent job while they were with us, and I have enjoyed many a good game improved by their hardware. I do currently own a Geforce card, and it's also a great product. I bear no ill will to Nvidia corporation, nor to any of its competitors.

Perhaps the *team* who developed the Voodoo line will go on to found another new company and develop some new product completely different from the Voodoo line. It was clear they needed to abandon that line of thought anyway.

Have a good holiday, guys!

DMA