RealTime IT News

QSound Labs to Acquire StreamMagic

QSound Labs, Inc. Wednesday signed a letter of agreement to acquire StreamMagic, Inc. in a stock transaction valued at approximately $100 million.

Under the terms of the letter of agreement, QSound will acquire Stream Magic, Inc. by issuing 26.5 million preferred shares for all of the outstanding stock of StreamMagic. The acquisition is expected to close in the second quarter.

The combination of QSound's enhanced audio and StreamMagic's broadband video delivery solutions is intended to enable content publishers to deliver rich media via the Internet in a cost-effective manner, the company said.

Immediately prior to the completion of this transaction, QSound said it plans to spin off its non-Internet audio business segment and its e-commerce business segment to shareholders in a new company that QSound intends to list publicly.

"This is the first step in QSound's previously announced plan to unlock shareholder value by monetizing our intellectual property assets through corporate reorganization and strategic alliances," said David Gallagher, president and chief executive officer.

"We believe the combination of the two companies will have much more leverage than the sum of the two operating independently. By combining with StreamMagic we will capitalize on StreamMagic's high performance Internet server management solutions and QSound's leading edge enhanced Internet audio to create a new generation of streaming content."