Woah – this one seems to have been glossed over in the press today. Sonic Solutions and DivX, Inc. announced today they have signed a definitive merger agreement for Sonic Solutions to acquire DivX Inc. DivX stockholders will receive a combination of cash and stock equaling $3.75 in cash and 0.514 shares of Sonic common stock for each share of DivX they hold.
According to the press release, Sonic believes DivX will provide the following key benefits:
- The acquisition could potentially double fiscal year 2012 earnings per share on a non-GAAP basis
- DivX technologies are expected to give Sonic a more extensive solution for Internet video delivery including the dominant tools for content preparation in “the cloud,” video playback, and Hollywood-approved DRM.
- DivX is expected to provide leverage to Sonic’s strategy of consumer electronics deployment
- The DivX brand is known worldwide as an indicator of compatibility, quality, and ease of use.
Summed up, DivX’s technology, capabilities, and market position is “expected to advance Sonic’s mission: to make publishing, delivery, and enjoyment of movies over the Internet as easy and widespread as DVD delivery is today.”
And what of DivX’s management team? Kevin Hell, DivX’s CEO, Dan Halvorson, DivX’s CFO and executive VP of operations, and David Richter, DivX’s executive VP of business & legal affairs and general counsel will help close the transaction and integrate the companies but will not continue in the combined company in their current positions.
