Sonic to buy DivX for $323 mn

BANGALORE, INDIA: Sonic Solutions agreed to acquire video compression software maker DivX Inc for about $323 million in cash and stock to boost its Internet-based video delivery products.

The deal values DivX's stock at about $9.83 per share, which represents a premium of about 41 percent over its Tuesday closing price of $6.95.

Sonic expects the acquisition to potentially double its adjusted earnings in 2012.

Sonic said it will pay $3.75 per share in cash and 0.514 shares for each share of DivX. In case of termination, DivX will have to pay a fee of $8.35 million, the companies said.

Shares of DivX rose about 24 per cent before the bell. Shares of Sonic closed at $11.83 Tuesday on Nasdaq.