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Monotype Acquires FontShop International

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.

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