Macromedia Buys Web App Development Software Maker Elemental

Computergram International, July 13, 1999

Macromedia Inc is to acquire web application development star Elemental Software for $24m in a stock for stock transaction. San Francisco, California-based Macromedia will exchange about 625,000 shares for all the outstanding equity of Elemental, which is a privately held company. The transaction will be accounted for as a pooling of interests and is expected to close within 45 days. Macromedia expects to take a one-time charge of around $3m for expenses related to the deal.

The acquisition adds dynamically generated web application tools to Macromedia's arsenal of products for professional web developers. As for Elemental, the sale should mean its flagship software Drumbeat can reach its full potential. "Macromedia has the brand, reputation and marketing resources to bring the Drumbeat 2000 product line to the broadest community of web publishers and developers," explained Elemental president and CEO Peter Hirshberg.

The Elemental products are supposed to slot neatly and logically into the Macromedia suite. As Hirshberg put it: "Developers can create pages and manage sites in Dreamweaver, dynamically publish web site graphics and animation with Generator, link database content to web pages with Drumbeat 2000 and easily create e- commerce storefronts with eStore Builder."