Dolby To Buy Coding Technologies

By Joseph Palenchar -- TWICE, 11/9/2007

San Francisco — Dolby Laboratories, the developer of compressed audio codecs such as Dolby Digital and Dolby TrueHD, signed a definitive agreement to acquire Sweden’s Coding Technologies, the developer of technologies that can be applied to existing codecs to boost their efficiency.

The purchase price is about $250 million, and Dolby said the transaction would close “very soon.”

Coding’s efficiency-enhancing technologies are used in the AAC+ and MP3Pro formats as well as in the HD-Radio format. The company is also a key contributor to MPEG Surround technology, which can be used with any existing compressed audio codec to deliver low-bit-rate multichannel surround over cellular and Mobile DTV networks and through satellite radio and HD-Radio broadcasts. The technology also delivers a virtual-surround experience though any pair of stereo headphones.

Dolby said the acquisition will “broaden its technology portfolio and expertise for emerging low-bandwidth media applications.”

“By adding Coding Technologies’ expertise and high-efficiency audio compression to our portfolio of technologies and services, we will be better positioned to support our customers as they continue to move into more bandwidth-constrained delivery methods such as mobile networks and the Internet,” said Dolby president/CEO Bill Jasper.

Coinciding with the announcement, Dolby released fourth-quarter and full-year fiscal results for the period ending Sept. 28. For the fourth quarter, revenue rose 26 percent to $129 million, and net income rose to $44.2 million from $25.2 million. For fiscal year 2007, revenue rose 23 percent to $482 million, and net income rose to $142.8 million, up from $89.5 million.