Tessera To Acquire DTS For $850 Million

Companies will combine to tackle IoT & virtual reality
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Tessera Technologies, a manufacturer of imaging and semiconductor packaging and bonding technologies, will acquire DTS in a cash deal valued around $850 million.

DTS’s audio solutions include DTS-HD and DTS:X audio codecs, DTS Headphone:X and DTS Sound pre-and post-processing solutions, DTS Play-Fi wireless audio, and HD Radio.

The two companies announced they have entered into a definitive agreement under which Tessera will acquire DTS for $42.50 per share, representing a 28 percent premium to DTS’s 30-day, volume-weighted average price as of Sept. 19. The all-cash transaction is valued at approximately $850 million.

According to a statement, the combined company will have “over 450 engineers focused on developing next-generation imaging, audio and semiconductor packaging technologies,” and “is forecasted to achieve pro forma 2016 revenue of approximately $450 million, nearly half of which will come from product licensing.”

See: How DTS Envisions Its Future

Said Tom Lacey, Tessera CEO: “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.”

Lacey will continue to serve as CEO while DTS chairman/CEO Jon Kirchner will become president.

The transaction has been unanimously approved by both companies’ boards of directors and is expected to close by the beginning of the first quarter of 2017.

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