Creative Technologies Acquires 3Dlabs

According to the terms of the deal, Creative will purchase 3Dlabs stock at $3.60 per share, with two-thirds being converted to Creative stock and the remaining to cash. That puts the total valuation of 3Dlabs at about $170 million. 3Dlabs' share price closed at $3.45 today, up 50 cents. 3Dlabs says it will continue to supply, support and develop all of its product lines, including the Wildcat and Oxygen, but the deal is clearly an effort for 3Dlabs to re-enter the desktop graphics market, which is currently dominated by Nvidia and ATI. "We have experienced a difficult financial period during which we continued to devote significant resources to the development of our breakthrough technologies," said Osman Kent, Chairman and CEO of 3Dlabs. "Creative can provide us the resources and opportunity to expand our leadership position beyond the high end professional graphics market." 3Dlabs said it will also continue to supply and support its chip and IP products to its embedded customers and will carry on its standardization activities with OpenGL 2.0, OpenML and embedded OpenGL in the Khronos Group and the Web3D Consortium. The transaction is still subject to the approval of 3Dlabs shareholders.