Sonic Solutions to acquire DivX
Will boost position in Web-based video deliverySonic Solutions, whose technology helps run Best Buy's CinemaNow and other digital streaming sites, said Wednesday that it will pay about $323 million for video-tech company DivX.
DivX's video technology is licensed by the likes of Sony and Samsung and is in about 300 million TV sets, DVD players and other devices. The companies say the merger will create an entity better able to deal with the challenges of distributing movies and TV programming securely over the Internet.
DivX has created digital rights management approved by Paramount, Warner Bros., Sony, Starz Media and Lionsgate. Its technology powers several TV and film sites including VOD destination Film Fresh and Warners' WBshop.com.
Sonic is paying $3.75 in cash and 0.514 shares of Sonic stock for each DivX share, valuing DivX stock at $9.83 a share, which represents a 41% premium to where the stock traded Tuesday.
After the deal closes, probably in September, DivX shareholders will own 35% of the merged company.
The companies said the DivX senior management team will stay on board to "close the transaction and integrate the companies but will not continue in the combined company in their current positions."