Roxio Acquires MGI Software Corporation

[J.A.F._Doorhof]

Roxio, Inc. has completed the acquisition of MGI Software Corporation. The intent to acquire was originally announced on Dec. 4, 2001. Pursuant to the terms of the agreement between the parties, the former shareholders of MGI will receive 0.05050 shares of common stock of Roxio for every one common share of MGI or a total of 2,203,451 shares. Based on Roxio's closing price as of Jan. 31, 2002 and the exchange rate, this amount represents a purchase price of approximately $35.4 million. On a per share basis, this represents a purchase price of approximately $0.81 U.S.

By adding the best-selling photo and video editing software products, PhotoSuite and VideoWave, to Roxio's best-selling CD burning, Easy CD Creator and Toast, and system recovery software, GoBack, the acquisition creates one of the world's largest digital media software companies with a global installed base of more than 100 million consumers.

"This acquisition broadens our footprint within the digital media software space and is key to Roxio's long-term strategy of providing a world-class suite of integrated digital media products that is unmatched in the industry," stated Roxio's President and CEO, Chris Gorog. "Roxio is delivering on its vision to be a one-stop shop, providing everything that consumers and OEMs need for a fun and successful digital media experience. Our new products address some of the fastest growing digital media markets according to International Data Corporation (IDC), which projects the installed bases of digital cameras and digital video cameras to reach over 80 million and 35 million, respectively, over the next five years. Additionally, we now have an opportunity to cross-sell between the Roxio and MGI installed base and to leverage that user base when we introduce exciting new products such as DVD recording software."

Roxio plans to issue a press release and hold a conference call and web cast to discuss the integration of MGI's products and technology and provide updated financial guidance for investors during the week of Feb. 25, 2002. Specific details on the conference call will be forthcoming closer to the date of the call.

CONTACT: http://www.roxio.com