Hamilton, Bermuda-based 3Dlabs Inc acquired Dynamic Pictures Inc yesterday in a stock for stock transaction. Privately-held Dynamic, from Santa Clara, California, supplies 2D and 3D graphics boards for Windows NT-based PC workstations, and is best known for its Oxygen brand of products, mostly sold through value added resellers. 3DLabs concentrates on the OEM market with specialist graphics chips such as Glint and Permedia. The company says the acquisition should help it broaden its business into vertically integrated board-level products for the PC workstation market, augmenting its Glint business in the same sector. Evans & Sutherland Inc recently acquired AccelGraphics Inc for much the same reasons (CI No 3,395). 3Dlabs acquires Dynamic Pictures for 1.8m common shares of 3Dlabs, and assumes the company’s debts and long-term liabilities of $2.9m. The acquisition will be accounted for as a purchase, and 3Dlabs says it expects to record a one-time write-off of in-process research and development and acquisition related charges in its third quarter. It expects the acquisition to be accretive to earnings per share in fiscal 1999, and expects operational cost savings once the two product lines are integrated. Two strategic business units, one focused on PC workstations and the other on PC desktops, are to be formed. Workstations will develop and market the board level products along with chip products for Windows NT and OpenGL-based PC workstations, combining the Glint business with the personnel, technology and distribution of Dynamic Pictures. The desktop business will concentrate on the Permedia chip technology, the third generation of which was released yesterday (see Today’s News).
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