US-based online video specialist NeuLion has acquired video technology specialist DivX in a US$62.5 million (€52.1 million) deal that it says will place it at the forefront of the 4K OTT video market and give it broader global reach.
Upon closing of the deal, Nancy Li, NeuLion’s CEO, will become executive vice chairman of the NeuLion board of directors and will drive the technology vision for the company, and Kanaan Jemili, DivX’s CEO, will be appointed CEO of NeuLion. The management teams and employees of both companies will be combined.
James Hale, DivX’s chairman and managing partner at Parallax Capital Partners, LLC, and John Coelho, a member of DivX’s board of directors and partner at StepStone Group LP, will join the NeuLion board of directors. As a result, NeuLion will expand its board to 11 seats.
The purchase price comprises US$37.5 million in shares of NeuLion common stock and a US$25 million two-year convertible note, subject to working capital adjustments. At closing, NeuLion will issue 35,890,216 shares of common stock at a set price of approximately US$1.045 per share.
DivX’s previous owner Rovi last year sold the company to Parallax Capital Partners. DivX recently unveiled plans to release a customer-focused mobile app in a bid to grow the B2C side of its business that also includes its free DivX video player.
“By delivering interactive viewing experiences to consumers watching live and on-demand content on digital platforms, from desktop to mobile to connected devices, NeuLion has built a roster of the best known brands in professional and college sports and TV Everywhere, such as NFL, NHL, NBA, UFC, Rogers and CCTV. Now, we are extending our franchise and bolstering our capabilities with our acquisition of DivX’s entertainment and consumer electronics customers, advanced 4K video enabling technology products and expansive geographic reach,” said Li.
“As a leading provider of next-generation digital video technologies for Over-The-Top services across consumer electronics devices and mobile platforms, DivX has licensed its technology to global brands spanning consumer electronics manufacturers, entertainment content rights holders and cable network operators, such as LG, Samsung, Toshiba and Hisense. With our recently introduced end-to-end HEVC solution, DivX is helping to drive adoption of 4K video and live streaming. We are excited about the opportunity to extend our reach into the global marketplace while we continue to create technologies that bring high quality viewing experience to digital media consumers,” said Jemili.