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X-Rite acquire Pantone

X-Rite, a leading provider of colour solutions for measuring, formulating, matching, and simulating colour, announced today it has entered into a definitive agreement to purchase Pantone, Inc. for $180 million. The deal is expected to close in the fall of 2007.

Pantone, Inc.,  is an authority on colour inspiration for the design world with the Pantone Matching System, an innovative system for identifying, matching and communicating colours to solve colour reproduction problems in the graphic arts market. Pantone has expanded its colour matching system to other industries where accurate colour reproductions are critical, including digital technology, fashion, home, plastics, architecture and contract interiors, and paint.

Pantone generated revenue of approximately $42 million in 2006 with adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) of approximately 27 percent of revenue. Pantone sells its products, services and technology directly, and through hundreds of licensees in over 100 countries in the graphic arts, fashion, home, interior, plastics, architectural, paint, industrial design and consumer markets.

Anticipated strategic, operational and financial benefits of the acquisition include:

• Deepening X-Rite's range of offerings by adding Pantone's colour standards to its leadership position in hardware, software and services solutions

• Leveraging X-Rite's global presence and distribution capabilities to expand the reach of Pantone's colour solutions

• Enhancing X-Rite's revenue-generating opportunities and further diversifying its revenue base

• Accelerating technology and business model innovation

• Achieving significant synergies in marketing, operations and administration

The transaction is expected to be accretive to X-Rite's cash earnings per share during year two of the combined operations. X-Rite expects to achieve approximately $6.5 million of annual operating expense cost savings associated with the transaction in year two. During the first year, the company expects to incur cash restructuring costs of approximately $5.5 million.

"Larry Herbert and his team have built Pantone into a very successful business and we are delighted that it will now be part of the X-Rite family," said Tom Vacchiano, chief executive officer of X-Rite. "This iconic brand is the perfect complement to X-Rite's business bringing Pantone's expertise and market position in colour communication and standards to our colour solutions product offerings. We believe that this strategic acquisition will provide value for our shareholders, customers, employees and partners."

"We have proven expertise in integrating sizable, strategic acquisitions into our business," Vacchiano continued. "We are confident that we can successfully blend the Pantone integration with our existing responsibilities as we evolve into a faster growing, more diverse business."

"Pantone and X-Rite have enjoyed a strategic partnership in providing colour management solutions for the digital imaging market for the last two years," stated Larry Herbert, chief executive officer of Pantone. "Our company is wholly committed to colour communication and inspiration and we are enthusiastic about combining our growing business with X-Rite to apply even greater resources to this work."

X-Rite
www.xrite.com

Pantone
www.pantone.com