[FoRK] Endeavors Tech/Stream Theory tie up

Peter Kilby peterkilby at dsl.pipex.com
Wed Jul 7 06:52:44 PDT 2004


Looks like Streaming, On Demand and Applications just got bigger for
Endeavors.



Tadpole Technology plc
                          Acquisition of Stream Theory

Tadpole Technology today announces that it has signed a definitive agreement
to
acquire Stream Theory, Inc., a California-based company that designs,
develops,
and markets distribution platforms and technology for the centralised
deployment
of management of application software over the Internet and across
enterprise
networks, principally within the games market.

The acquisition is subject to approval by the shareholders of both companies
and
supports Tadpole's vision to become the industry-standard for on-demand
streaming software. Through its Endeavors Technology subsidiary, Tadpole
currently addresses the enterprise market in the US and Europe; with Stream
Theory, it gains access and immediate revenues from the Japanese consumer
games
markets, and a platform to penetrate other markets world-wide. The combined
entity will become an industry leader in the development of streaming
solutions
for the enterprise and consumer games markets.

Stream Theory has signed an initial $9million exclusive distribution
agreement
with a large Japanese broadband Internet provider; who will use Stream
Theory's
server technology to distribute games and other software applications over
its
broadband network.

Under the terms of the acquisition, Tadpole will buy the entire share
capital of
Stream Theory for an initial consideration of $25 million in Tadpole shares
at
the strike price of 15.75p. A further consideration will be payable in
Tadpole
shares to Stream Theory's owners based on two times new revenues generated
from
the Japanese broadband Internet provider, over the next two years.

Furthermore, if the shareholders ratify the agreement, the current CEO and
president of Stream Theory Inc, Mr. Steig Westerberg, will join the board of
Tadpole Technology plc. He will have the role of chief operating officer -
Streaming Technologies Americas and Japan and will report to Mr. Keith
Bigsby,
chief executive officer of Tadpole's streaming division. Mr. Westerberg will
have an annual base salary of $275,000 and a commission of 5% on all revenue
from the Japanese broadband Internet provider. In addition, he will receive
an
annual performance bonus of up to 90% of his base salary based upon
performance
targets set by Tadpole's Remuneration Committee. Mr. Westerberg will also
receive private medical insurance and life assurance and the Board has
agreed to
award Mr. Westerberg 4,000,000 options on Tadpole shares on completion of
the
acquisition.

Stream Theory is an established instant software distribution solution that
delivers and manages software applications over the Internet and private
networks. Stream Theory's streaming software service was developed for game
publishers and developers, software e-tailers, software portals and
application
service providers. Stream Theory streams software applications from its
servers
to users' desktops when connected to a web site, corporate intranet or
virtual
private network. Applications are delivered securely, and are not installed
on a
user's hard drive.

Founded in 1996, Stream Theory is a privately-held company based in Santa
Clara,
California. Its software is sold through distributors and software games
publishers. In the year to 31 March 2004, Stream Theory had revenue of
$1.6million with a net loss of $0.4million and the company had net
liabilities
of $0.7 million. At 30 June 2004, Stream Theory employed a staff of 10
.
A circular containing further details of the proposed acquisition and
convening
an Extraordinary General Meeting to seek the requisite approvals will be
sent to
shareholders in due course.

Reasons for and benefits of the acquisition

As part of a strategic review of the streaming software market, Tadpole's
Board
identified significant synergies between its Endeavors Technology
subsidiary,
which targets the enterprise market, and Stream Theory's offerings for the
consumer games market.

Both Endeavors and Stream Theory develop and sell software that streams
applications on-demand over the network to individual PCs. In addition,
Endeavors has a distribution model for enterprise applications through
managed
service providers and telcos in the US, whilst Stream Theory, with its
recent
contract from the Japanese broadband Internet provider, has strong inroads
into
the Japanese market.

Tadpole sees significant opportunity for the combined companies to expand
the
streaming of enterprise software in Asia, initially with Japan, and to
expand
games and consumer software streaming with telcos and ISPs (Internet Service
Providers) in the US and Europe.

Stream Theory's technology also complements Endeavors' technology. Stream
Theory
holds a key "technology defining" patent whose methods will broaden the
scope of
software piracy protection available from Endeavors' products. Stream
Theory's
StreamFlow Architecture optimises the delivery of consumer and gaming
applications across lower bandwidth connections. Further, Stream Theory's
software player product, Stream Theory PlayerTM, enables customers to
deliver
messages, advertisements, promotions and sponsorships to their end users
prior
to the start of the software experience.





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