M&A

Restatement Won’t Sway Software Merger

Macromedia will restate results for fiscal 1999 through fiscal 2004.
Stephen TaubMay 6, 2005

Adobe Systems Inc. announced that it will proceed with its plans to acquire Macromedia Inc., which earlier this week disclosed a restatement of its financials for the past five years.

“As part of the acquisition process, we performed a customary due-diligence effort and understood Macromedia’s financial condition in moving ahead with the transaction,” wrote Adobe chief financial officer Murray Demo in an E-mail statement, according to the Associated Press.

Last month, Adobe — the San Jose, California-based software developer best known for PDF documents — agreed to buy San Francisco-based Macromedia, which makes Flash and other multimedia software, for $3.4 billion in an all-stock deal.

On Tuesday, Macromedia reported a $6.1 million understatement of a liability related to the accrued benefit of an employee sabbatical-leave program, which the company adopted in 1999. As a result, the company will restate its results from that year through fiscal 2004.

The company added that it will restate its financials by $2.1 million for the past three years to adjust its income-tax provision for foreign tax bills.