Monotype Acquires FontShop International

  Monotype Acquires FontShop International

Business Wire

WOBURN, Mass. -- July 15, 2014

Monotype Imaging Holdings Inc. (Nasdaq: TYPE), a leading provider of
typefaces, technology and expertise for creative applications and consumer
devices, today announced it has acquired FontShop International GmbH of
Berlin, Germany, and its U.S. subsidiary, FontShop International Inc., based
in San Francisco. The transaction also includes the FontFont® typeface
library, FontShop AG of Berlin, the largest distributor of the library, and 13
typeface families principally designed by renowned typeface designer and
co-founder of FontShop, Erik Spiekermann. Many of Spiekermann’s designs, such
as the FF® Meta® typeface family, are used extensively by brands and
publications across the globe.

With the acquisition of FontShop, Monotype expects to grow its customer base,
expand its typeface IP and provide additional value to creative markets,
particularly in Germany, which is widely recognized as one of the world’s
strongest regions in design. Monotype’s global reach, financial strength and
passion for type, combined with FontShop’s complementary typeface expertise,
industry relationships and premier typeface collection, is expected to
strengthen Monotype’s ability to serve global markets and deliver
high-quality, branded experiences across every screen, platform or media
property.

“As a company dedicated to type, we’re excited about the addition of FontShop,
another company with design and type in their DNA,” said Doug Shaw, president
and CEO of Monotype. “FontShop’s strong relationships with typeface designers,
acute knowledge of the creative professional community, high-quality IP,
strong e-commerce business and highly regarded TYPO events, will add immediate
value to our business and help us continue on our mission of being the first
place to turn for typefaces, technology and expertise.”

With more than 2,500 typefaces, FontShop’s FontFont library has a reputation
of being one of the most prestigious type collections in the world,
representing contemporary design that is viewed by the industry as original
and on trend, promoting creativity, playfulness, ease-of-use and high quality.
FontShop’s annual TYPO conferences are held in Europe and the U.S., and bring
together industry luminaries and professionals who present and share insights
on typography, design and visual communication. Monotype intends to continue
the TYPO events.

“After 25 years of fruitful cooperation and partnership, I am really looking
forward to the collective expertise that we’ll be able to deliver to the
market as FontShop becomes a part of Monotype,” said Petra Weitz, general
manager of Monotype Berlin and former CEO of FontShop. “We know each other’s
strengths and together we can better serve the type and design community in
ways that we weren’t able to do as single, standalone organizations. I am
excited about the possibilities moving forward."

Erik Spiekermann, typeface designer and co-founder of FontShop said, “As a
typeface designer who cares deeply about the industry in which I work, I have
watched Monotype not merely survive, but grow and prosper. They have become
respected experts in the business and the technology of type. Having my
typefaces become part of the Monotype foundry will make sure that they, as
well as the other FontFonts, will benefit from Monotype’s strengths. The
industry-at-large will be stronger once FontShop adds its creative prowess to
Monotype’s business.”

Transaction details
The deal is structured as three transactions with an aggregate cash purchase
price of approximately $13 million. Monotype will acquire FontShop’s
annualized revenue stream of approximately $9 million, which should generate
approximately $1.5 million in annualized net adjusted EBITDA. Transaction and
integration costs of $3 million are expected to be incurred in the first year
subsequent to the transaction date.

Forward-looking statements
This press release may contain forward-looking statements, including those
related to expected growth in Monotype’s customer base, expansion of its font
offerings and the expected financial impact of the acquisition. These
forward-looking statements involve risks and uncertainties that could cause
the company’s actual results to differ materially. Factors that might cause or
contribute to such differences include, but are not limited to: risks
associated with changes in the economic climate, risks associated with the
company’s ability to integrate the products and services, and risks associated
with the company’s ability to integrate the acquisition. Additional disclosure
regarding these and other risks faced by the company is available in the
company’s public filings with the Securities and Exchange Commission,
including the risk factors included in the company’s Annual Report on Form
10-K for the year ended Dec. 31, 2013 and subsequent filings. The financial
information set forth in this press release reflects estimates based on
information available at this time. While Monotype may elect to update
forward-looking statements at some point in the future, the company
specifically disclaims any obligation to do so, even if an estimate changes.

About Monotype
Monotype is a leading global provider of typefaces, technology and expertise
that enable the best user experience and ensure brand integrity. Headquartered
in Woburn, Mass., Monotype provides customers worldwide with typeface
solutions for a broad range of creative applications and consumer devices. The
company’s libraries and e-commerce sites are home to many of the most widely
used typefaces – including the Helvetica®, Frutiger® and Univers® families –
as well as the next generation of type designs. Further information is
available at www.monotype.com. Follow Monotype on Twitter, Instagram, LinkedIn
and Monotype’s Type Case blog.

Monotype, Helvetica, Frutiger and Ascender are trademarks of Monotype Imaging
Inc. registered in the U.S. Patent and Trademark Office and may be registered
in certain jurisdictions. Linotype and Univers are trademarks of Monotype GmbH
registered in the U.S. Patent and Trademark Office and may be registered in
certain jurisdictions. ITC is a trademark of Monotype ITC Inc. registered in
the U.S. Patent and Trademark Office and may be registered in certain
jurisdictions. Bitstream a trademark of MyFonts Inc. registered in the U.S.
Patent and Trademark Office and may be registered in certain jurisdictions.
Ascender is a trademark of Monotype Imaging Inc. FontShop, FontFont, FF, Meta,
FF DIN and FF Scala are registered trademarks of FontShop International GmbH.
All other trademarks are the property of their respective owners. © 2014
Monotype Imaging Inc. All rights reserved.

                       Monotype Acquisition of FontShop

FREQUENTLY ASKED QUESTIONS

About the acquisition

1. What is FontShop?
FontShop is a leading provider of typefaces based in Berlin, Germany, with an
office in San Francisco. Formed in 1990 as a place where “type was made for
designers by designers,” FontShop has earned a reputation as a respected
authority on type and design. FontShop is the brand behind the FontFont®
collection, home to some of the world’s most widely used branding typefaces,
including the FF® Meta®, FF DIN® and FF Scala® designs. FontShop is also the
founding brand of the international TYPO events, recognized for their
high-quality discussions on typography, design and visual communication.

2. Why did Monotype acquire FontShop?
Monotype is a leading, global provider of typefaces, technology and expertise
for creative applications and consumer devices. The addition of FontShop
provides Monotype with the opportunity to grow its customer base, expand its
IP and provide additional value to creative professionals, particularly in
Germany, one of the world’s strongest regions in design. Monotype believes
that its global reach, financial strength and passion for type, combined with
FontShop’s complementary typeface expertise, well established industry
relationships, and premier typeface collection, will position Monotype to
better serve its markets.

The company has had a long-standing relationship with FontShop and recognizes
the value of its contributions to the typographic and design communities.
Monotype believes the acquisition will enable it to move forward in a way that
will allow the FontFont library to continue to grow and thrive – and benefit
the type and design communities.

The company intends to integrate programs such as FontShop’s ongoing TYPO
events – programs that reflect FontShop’s unique value and contribution to
creative communities. These events serve as a foundation of creativity and are
complementary to Monotype’s overarching focus on typefaces, technology and
expertise.

3. What are the components of the acquisition?
Monotype has acquired Berlin-based FontShop International GmbH, which includes
its wholly owned subsidiary, FontShop International Inc., based in San
Francisco. In addition, the transaction comprises three other components:
FontShop’s FontFont library, FontShop AG of Berlin (the largest distributor of
the library), and 13 typeface families principally designed by Erik
Spiekermann – 12 of which are from the FontFont library and one from the
FontShop AG collection. A wide range of brands and publications across the
globe have used Spiekermann’s FontFont designs including Infiniti and Mozilla,
among others.

4. What were the financial terms of the transaction?
The deal is structured as three transactions with an aggregate cash purchase
price of approximately $13 million. Monotype will acquire FontShop’s
annualized revenue stream of approximately $9 million, which should generate
approximately $1.5 million in annualized net adjusted EBITDA. Transaction and
integration costs of $3 million are expected to be incurred the first year
subsequent to the transaction date.

5. When did the acquisition close?
The acquisition closed on July 14, 2014.

Customer-specific

6. Who are FontShop’s customers?
FontShop’s customers are primarily creative professionals working in a variety
of industries worldwide.

7. How are customers expected to benefit from the acquisition?
With the addition of FontShop’s offerings and expertise, Monotype believes
that its customers will ultimately benefit with more and better choices. For
example, new typefaces are expected to be added to the FontFont library, and
the company intends to expand existing typeface families and extend
availability and licensing options for a wide range of environments from
screen to print. The company aims to integrate FontFont offerings in a way
that enables brands to better ensure brand expression across today’s digital
landscape. Monotype also intends to preserve and extend the designer and
customer-oriented focus that’s been a hallmark of FontShop’s business.

Strategy and integration

8. What will happen to the FontShop and FontFont brands?
Although the FontShop corporate brand will be retired, Monotype expects to
continue to operate the FontShop- and FontFont-branded e-commerce sites. The
FontFont typeface collection will become part of the Monotype® Libraries,
which already include the Monotype, Linotype®, ITC®, Bitstream® and Ascender™
typeface collections.

9. How will FontShop be integrated into Monotype?
FontShop brings to Monotype some of the world’s most experienced and talented
type professionals. The team is expected to positively impact Monotype in a
number of ways, adding strength and breadth in areas such as typeface design,
language extension, font technology, e-commerce, marketing, sales, customer
support and designer relations. FontShop’s FontFont collection, with more than
2,500 designs, will be integrated as part of the Monotype Libraries, available
through Monotype’s sales teams and the company’s e-commerce sites, which
include MyFonts, Fonts.com, Linotype.com, and now FontShop.com and
FontFont.com. Moving forward, Monotype expects to add new fonts to the
FontFont collection, enhance and extend existing designs, add new licensing
options and bring more flexibility for use in a variety of publishing, Web and
display environments.

10. What will happen with the TYPO conferences?
FontShop’s TYPO conferences (held in Berlin, London and San Francisco) have
served as a platform for industry professionals to present and share knowledge
on typography, design and visual communication. These events have also
inspired students, emerging designers and future influencers of the
typographic and design communities. Moving forward, Monotype intends to
continue with TYPO conferences.

11. How will Erik Spiekermann work with Monotype?
Erik Spiekermann, co-founder of FontShop International and principal designer
of 13 typeface families that are part of the acquisition, is a respected
authority on type and design, as well as one of the most well known
personalities in the industry. Spiekermann is expected to assume a
consultative role for Monotype to help promote various type- and
design-related opportunities.

Contact:

Monotype
Amy Peterson, 781-970-6070
amy.peterson@monotype.com
or
Investor Relations contact:
Monotype
Chris Brooks, 781-970-6120
Chris.brooks@monotype.com
 
Press spacebar to pause and continue. Press esc to stop.