Sonic Acquiring DivX for $300 Million

Sonic Solutions—the company that make the Roxio media-burning software and owns the CinemaNow movie streaming service—has announced it is acquiring video codec company DivX in a deal worth about $300 million. DivX is probably best known as a video format for distributing online video—especially via peer-to-peer sharing networks like BitTorrent—but has also has been adopted by an growing range of consumer electronics devices. Sonic is looking to DivX to bolster its reach into consumer’s living rooms, bother through hardware support in gadgets but also through downloadable media…you know, like CinemaNow.

“By combining our products, technologies, partnerships, and talented employees, we immediately create a complete end-to-end delivery platform for digital media, with expanded reach and capacity, at a perfect time to capitalize on the market’s rapid development,” said DivX CEO Kevin Hell, in a statement. “With the acquisition of DivX, Sonic should be extremely well positioned to serve existing customers, attract new partners, and increase our market presence and potential.”

DivX says its technology is already used in products from more than 150 consumer electronics manufacturers, and is “known worldwide” as an symbol of quality and compatibility. Sonic wants to leverage DiVX technologies to augment Internet- and cloud-based content delivery solutions, including support for Hollywood-blessed DRM schemes: the company recently announced a deal with leading electronics retailer Best Buy to bring the CinemaNow online movie service to PCs as well as selected home theater gear.

The deal is subject to shareholder approval, but is expected to close by September; DivX’s executive team expects to stay on-hand through a transition period, but will not be part of the company after the deal is closed.

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