DTS, the supplier of audio-processing and surround-decoding technology, entered into a definitive agreement to buy iBiquity Digital, the developer of digital HD Radio broadcasting technology, for about $172 million.
The purchase “complements our existing suite of technology and content delivery solutions” and will enable the company “to strengthen our position in the large automotive OEM market,” said DTS chairman/CEO Jon Kirchner. He said he sees “a tremendous opportunity for DTS to capitalize on the upgrade to HD Radio technology as cars are increasingly equipped with screens and advanced entertainment systems.”
HD Radio technology, which iBiquity licenses to automakers and CE suppliers, is the sole FCC-approved method for upgrading AM/FM broadcasting from analog to digital, DTS noted. HD Radio got its start in October 2002 when the FCC approved the HD Radio standard.
For his part, iBiquity president/CEO Bob Struble said iBiquity will “benefit from the additional scale and enhanced resources of a larger collective company.”
The number of U.S. radio stations broadcasting an HD Radio signal plateaued since around 2010 at more than 2,200 radio stations out of about 15,358 commercial and educational stations in the U.S., though those stations reach almost 90 percent of the U.S. population in almost 300 metro areas, iBiquity has said.
Although HD Radio has made advances in the OEM and aftermarket car audio markets, it is not widely available in home or portable audio products.
All 36 major auto brands selling into the U.S. offer HD Radio technology on some of their vehicles, many as standard equipment, publicly held DTS said. HD Radio was built into around 35 percent of cars sold in the U.S. in 2014, the Calabasas, Calif., company added. The company expects most North American vehicles to come equipped with HD Radio technology over time.
Struble will lead DTS’s HD Radio business after the acquisition, expected to close later this year. Privately held iBiquity, based in Columbia, Md., employs about 120 people.
The purchase is expected to close later this year, financed through a combination of cash and debt.
The iBiquity acquisition is not DTS’s first acquisition. The company in 2012 acquired SRS Labs for about $148 million, bringing together two publicly traded companies whose audio-related patent portfolios were complementary, DTS said at the time. The acquisition was designed to accelerate DTS’s expansion into mobile phones and network-connected devices that stream content from the Cloud, the company added.
DTS is the developer of surround-sound codecs such as DTS 5.1, DTS-HD Master, DTS High Resolution, and DTS:X. The technologies appear in such products as Blu-ray and DVD players, A/V receivers, home-theater systems, car audio systems, PCs and game consoles. DTS technologies also appear in set-top boxes, digital media players and cellphones.