SAN DIEGO
& AACHEN, Germany, Nov 14, 2007
(BUSINESS WIRE) -- DivX, Inc. (NASDAQ:DIVX)
today announced it has acquired
MainConcept AG, a leading provider of
H.264 and other high-quality video
technologies for the broadcast, film,
consumer electronics and computer
software markets. The acquisition is a
stock and cash transaction valued at
approximately $22 million with
additional payments of up to
approximately $6 million upon the
achievement by MainConcept of certain
product development goals and certain
financial milestones during 2008.
MainConcept designs, manufactures and
markets a wide range of high-quality
video and audio technology based on
industry standards. Its key partners
include leading software, entertainment
and consumer electronics companies.
MainConcept's portfolio of video
technologies, including its industry
leading H.264 video codec, is expected
to extend the DivX(R) common media
language to additional platforms and
formats. The combination of DivX and
MainConcept is intended to create a
company with substantial scale and
resources to deliver products and
services that offer the consumer a
powerful, yet seamless high-quality
media experience.
"We are
extremely pleased to add MainConcept to
the DivX family," said Kevin Hell, CEO
of DivX. "Company founder Markus Moenig,
our new Senior Vice President, has
worked with a talented team of engineers
to build a successful company with award
winning next-generation codec technology
that is highly complementary to the core
DivX licensing business. MainConcept's
H.264 technology is expected to increase
our market opportunity and speed our
penetration of key emerging product
categories, including mobile, HDTV,
set-top boxes and digital still cameras.
With this combination, we are executing
on our strategy to deliver a seamless
and simple digital media experience
where any piece of content plays back on
any kind of device, and formats and
codecs are completely transparent to the
end-user."
"This is a
great partnership that we believe will
prove beneficial to both MainConcept and
DivX," said Markus Moenig, CEO and
Founder of MainConcept AG. "Our product
suites and business models are highly
complementary, and our combined
companies offer a rich solution for the
creation, distribution and playback of
high-quality video across virtually any
platform or device. We look forward to
bringing these two great teams
together."
"MainConcept
is a solid strategic complement to our
high gross margin licensing business,"
stated Dan Halvorson, DivX Executive
Vice President and Chief Financial
Officer. "The increased costs related to
operations and the integration of
MainConcept could impact our fourth
quarter by approximately $0.02 to $0.03
per diluted share. We expect this
acquisition to be accretive to our
quarterly earnings in the second half of
2008."
Conference
Call
The DivX
management team will host a conference
call and simultaneous audio webcast
today at 5:00 p.m. ET or 2:00 p.m. PT.
To access the call, please dial
(888)
820-9410
or
(913)
312-0641
for international callers. Please call
five minutes prior to the scheduled
conference call time. The audio webcast
will be available at http://investors.divx.com.
An audio replay of the conference call
will be accessible by telephone after
8:00 p.m. ET or 5:00 p.m. PT until
midnight November 22, 2007 by dialing
(888)
203-1112
or
(719)
457-0820
with the replay code 2301643.
About DivX
DivX, Inc.
is a digital media company that enables
consumers to enjoy a high-quality video
experience across any kind of device.
DivX creates, distributes and licenses
digital video technologies that span the
"three screens" comprising today's
consumer media environment -- the PC,
the television and mobile devices. Over
100 million DivX Certified devices have
shipped into the market from leading
consumer electronics manufacturers. DivX
also offers content providers and
publishers a complete solution for the
distribution of secure, high-quality
digital video content. Driven by a
globally recognized brand and a
passionate community of hundreds of
millions of consumers, DivX is
simplifying the video experience to
enable the digital home.
About
MainConcept
MainConcept is the worldwide leading
provider of high-quality codec
technology for the broadcast, film,
consumer electronics, computer software,
medical imaging and security markets.
MainConcept solutions are optimized for
various platforms including PCs, set-top
boxes, portable media players and mobile
phones. MainConcept supports the most
popular industry standards such as
MPEG-2, MPEG-4 Part 2, H.264/AVC, VC-1,
DV, DVCPRO, DVCPRO HD, JPEG2000, AAC,
HE-AAC and AC3.
MainConcept is headquartered in Germany
with subsidiaries in the USA, Russia,
and Japan. The company serves the
Asia-Pacific region through key
distribution partners in China, Korea,
and Taiwan. MainConcept customers
include some of the most respected
international companies including Adobe,
Leitch/Harris, Microsoft, mobiTV, Sonic
Solutions, Sony, and Panasonic.
For more
information about MainConcept and
available codecs visit
www.mainconcept.com. Parties interested
in licensing MainConcept technology can
contact the company at
sales(at)mainconcept.com.
Forward
Looking Statement
Statements
in this press release that are not
strictly historical in nature constitute
"forward-looking statements." Such
statements include, but are not limited
to, statements regarding the anticipated
benefits of the acquisition of
MainConcept to DivX, its customers and
shareholders, activities expected to
occur in connection with the
acquisition, the anticipated utilization
of MainConcept's products and technology
following the acquisition, the expected
extension of the DivX common media
language to additional platforms and
formats, the ability of MainConcept's
H.264 technology to increase the
Company's market opportunity and
accelerate penetration of key emerging
product categories, the expectation that
the acquisition will be accretive to
earnings in 2008, and the potential
impact of the acquisition on fourth
quarter 2007 earnings. Such
forward-looking statements involve known
and unknown risks, uncertainties and
other factors which may cause DivX's
actual results to be materially
different from historical results or
from any results expressed or implied by
such forward-looking statements. These
factors include, but are not limited to:
risks related to the integration of
MainConcept technology with the
Company's products; risks related to the
implementation of the acquisition; risks
related to any uncertainty surrounding
the acquisition; risks associated with
disruption to the Company as a result of
the acquisition; risks that the expected
financial effect of the acquisition may
not be realized; risks that the expected
customer benefits may not be realized
and risks associated with the operation
of the business in general; the risk
that the anticipated benefits of the
acquisition may not materialize to the
extent expected, or at all; the risk
that customer use of DivX technology may
not grow as anticipated; the risk that
anticipated market opportunities may not
materialize at expected levels, or at
all; risks and uncertainties related to
the maintenance and strength of the DivX
brand; DivX's ability to penetrate
existing and new markets; the effects of
competition; DivX's dependence on its
licensees and partners; the effect of
intellectual property rights claims; and
other factors discussed in the "Risk
Factors" section of DivX's quarterly
report on Form 10-Q filed with the SEC
on November 14, 2007. All
forward-looking statements are qualified
in their entirety by this cautionary
statement. DivX is providing this
information as of the date of this
release and does not undertake any
obligation to update any forward-looking
statements contained in this release as
a result of new information, future
events or otherwise, other than as
required under applicable securities
laws.
