Logitech Acquires Intrigue Technologies (Harmony Remote)
FREMONT, Calif., May 5, 2004 and ROMANEL-SUR-MORGES, Switzerland, May 6, 2004 - Logitech International (SWX: LOGN) (Nasdaq: LOGI) today announced that it has purchased the maker of the highly acclaimed Harmony Remote advanced remote controls - privately held Intrigue Technologies of Canada - for $29 million in cash, plus a possible performance-based payment, tied to reaching certain future remote control revenues. Intrigue, which will remain in Mississauga, Ontario, has pioneered an innovative approach to solving the problem faced by most consumer households - too many complicated remote controls. Intrigue offers a line of advanced remote controls that are affordable, easy to set up and simple to use.
The acquisition of Intrigue is part of Logitech's strategy to expand its presence in the digital living room. The company already is a leading provider of products for the living room, with its controllers and audio products for console gaming, which have enjoyed robust sales growth during the last twelve months. Logitech plans to build on this momentum by combining its experience in control devices for the PC - most notably, the computer mouse - with Intrigue's expertise and technology, to become the leader in an emerging market category.
" This acquisition allows us to position Logitech at the convergence of consumer electronics and personal computing in the living room," said Guerrino De Luca, Logitech president and chief executive officer. "Logitech's personal interface products are the point of contact between people and the digital world, the 'last inch' - in homes, in offices and on the go. Logitech intends to be the defining and leading provider of the last inch in the living room and in the digital, connected home. The acquisition of Intrigue comes at the right time and provides the right assets to help us firmly establish our leadership."
" As the leader in computer mice, with more than a half billion units sold, Logitech understands how a well-designed, easy-to-use control device can dramatically improve user effectiveness and comfort," said David Henry, Logitech senior vice president of the Control Devices Business Unit. "We believe that the advanced remote control will establish itself as 'the mouse of the digital house' and that Logitech is uniquely positioned to do for the emerging digital devices in the living room what it has already done for the PC."
Until recently, advanced remote controls have been too hard to set up, too hard to use, or too expensive. With the affordable Harmony Remote, people can easily customize the advanced remote for their own digital-entertainment setup using the Harmony Remote website. Once configured, the Harmony remote organizes entertainment control into simple activity selections like "Watch TV" or "Watch a DVD". Intrigue's award-winning products are currently available through selected retailers and specialist channels in the United States and Canada.
" Intrigue was founded on the idea that there can be widespread market adoption of an activitybased advanced remote control that is affordable, easy to configure and easy to use," said Bryan McLeod, chief executive officer of Intrigue Technologies. "Now, Co-founders Glenn Harris and Justin Henry and I look forward to being part of Logitech and to accelerating delivery on this promise by leveraging the company's strong brand, global distribution, and expertise in engineering, manufacturing and supply chain management."
" The market for convergence and advanced entertainment remote controls that provide simple solutions for using today's complex entertainment systems will grow as consumers become aware of them," said Tricia Parks, president of market research firm Parks Associates. "Our early estimates indicate that the worldwide market for these types of remote controls will be approximately $500 million in 2004, with annual future growth in double digits."
" The category of advanced remote controls is in its infancy," said Bob O'Donnell, senior industry analyst for IDC. "There is potential to completely transform this category and accelerate its growth, when you combine the convergence of the PC and consumer electronics with innovative new concepts and designs."
Logitech expects the acquisition of Intrigue Technologies to add $10 to $20 million in sales during the current fiscal year, with an immaterial effect on operating income. "Beyond FY 2005," said De Luca, "We expect the category of advanced remote controls to deliver strong profitable growth."
About Intrigue Technologies Inc.
Glen Harris and Justin Henry, two biomedical engineers, founded Intrigue Technologies Inc. in 1999. They were frustrated by the complexity of operating a "simple" home theatre system and the plethora of remote control devices that were required. After identifying the opportunity for a " Web-connected" advanced remote control, they spent three years developing the Harmony Remote. The company's vision is to produce revolutionary products that help consumers simplify their everyday lives. For more information on Harmony Remote's full product line visit www.HarmonyRemote.com.
Founded in 1981, Logitech designs, manufactures and markets personal interface products that enable people to effectively work, play, and communicate in the digital world. With corporate headquarters through its U.S. subsidiary in Fremont, California, and regional headquarters through local subsidiaries in Switzerland, Taiwan and Hong Kong, Logitech International is a Swiss public company traded on the Swiss Stock Exchange (LOGN) and in the U.S. on the Nasdaq National Market System (LOGI). The company has manufacturing facilities in Asia and offices in major cities in North America, Europe and Asia Pacific.
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This press release contains forward-looking statements, including the statements regarding the expected effect of the acquisition on Logitech's financial performance and Logitech's potential for leadership in the advanced remote control market. These forward-looking statements involve risks and uncertainties that could cause Logitech's actual performance to differ materially from that anticipated in these forward-looking statements. Factors that could cause actual results to differ materially include Logitech's ability to successfully integrate Intrigue's products, technology and operations, the retention of Intrigue's employees, and whether (and how quickly) the market for advanced remote controls develops and evolves as anticipated. For information regarding other related risks, see the risk factors section in Logitech's Annual Report on Form 20-F for the fiscal year ended March 31, 2003, and subsequent filings, available from the SEC's Edgar database at www.sec.gov and upon request from Logitech by calling (510) 713-4220. Logitech does not undertake to update any forward-looking statements.