Digital video compression specialist DivX planned to acquire Aachen-based MainConcept AG, a supplier of H.264 and other video technologies for broadcast, film, consumer electronics and computer software. The transaction combined cash and shares valued at approximately $22 million, plus up to $6 million in additional payments if MainConcept reached defined product-development and financial milestones in 2008.
Codec portfolio and licensing
MainConcept designed and licensed standards-based audio and video technology to software, entertainment and consumer-electronics companies. DivX expected MainConcept’s codec portfolio, including its H.264 technology, to extend the DivX common media language across additional platforms and formats.
DivX chief executive Kevin Hell said MainConcept founder Markus Mönig would become a senior vice president. He expected the H.264 technology to expand opportunities in mobile products, HDTV equipment, set-top boxes and digital cameras, while complementing DivX’s core licensing business.
Mönig said the companies’ products and business models were complementary and could cover the creation, distribution and playback of high-quality video across a wide range of platforms and devices.
Financial expectations
DivX chief financial officer Dan Halvorson said acquisition and integration costs could affect fourth-quarter earnings by $0.02 to $0.03 per diluted share. The company expected the acquisition to contribute positively to quarterly results in the second half of 2008.