Tessera Technologies has agreed to buy HD Radio Parent DTS in an all-cash deal valued at around $850 million. The combined company will be headed by Tessera CEO Tom Lacey while DTS Chairman/CEO Jon Kirchner will serve as president. DTS acquired HD Radio developer iBiquity in September of 2015.
Lacey said, “Our acquisition of DTS’s talented team and industry-leading products will represent a transformational step in the execution of Tessera’s strategic vision, with exciting new product development and marketing opportunities. We expect this acquisition to be immediately accretive to Tessera’s earnings and accelerate growth. Our complementary technology portfolios are ideally suited to deliver the next generation of audio and imaging solutions to mobile, consumer electronics, and automotive markets while expanding our ability to address incredible new opportunities in IoT and AR/VR.”
The San Jose-based Tessera’s FotoNation imaging technologies are used in smart devices worldwide, and it also develops and licenses various technologies under the Invensas banner. DTS, along with HD Radio, offers various audio codecs, DTS Play-Fi wireless audio, and other audio products.
Kirchner called the deal an “exciting transaction that provides substantial and immediate value to our shareholders.” He said, “We believe that as part of Tessera we will be in a unique position to deliver the world’s leading audio and imaging solutions to all of our key markets and drive meaningful value for our combined customers, partners, and employees.”
The deal will be all-cash, with DTS stockholders entitled to receive $42.50 per share when the deal closes; all of DTS’s outstanding debts will be retired at closing as well.
The deal is expected to close in Q4 of this year or the first quarter of 2017.
