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Macrovision in a $96M DRM Buy

Digital rights management (DRM) player, Macrovision , said it has struck a deal valued at $96 million to acquire privately held InstallShield.

The agreement will give Macrovision's FLEXnet software licensing and management platform a larger presence in Schaumburg, Ill.-based InstallShield's large software-developer customer base. At last count, InstallShield's software and services reached more than 69,000 developer organizations and 500 million computer desktops worldwide.

Macrovision said software coming from the combined companies will help software publishers and companies keep track of their creations from development all the way to the end user, including installation, administration and updating.

"Our software-developer customers have told us that they want seamless solutions that will allow them to price, package, protect, deliver, install and update their software, allowing them to focus on the development and release of their products," Bill Krepick, president and CEO of Macrovision, said in a statement published Thursday.

Santa Clara, Calif.-based Macrovision develops and markets DRM, copy protection and electronic license-management technologies for enterprise clients. The company's copy-protection technologies have been included in more than five billion CDs, DVDs and VHS cassettes. Last year, Macrovision hatched plans to develop tools that create "second session" files. The technology is seen as a crucial step in the quest to figure out how to protect copyrights on music CDs, yet still allow them to be reformatted and transferred to PCs and portable devices.

Now, Krepick is plotting a course for revenue streams to pad Macrovision's product portfolio in the Software Value Management category. These types of tools let corporate IT staff repackage applications, resolve potential conflicts, optimize license purchases and manage updates. Macrovision said it plans on expanding both companies' sales teams, distribution partners and development resources.

The acquisition has been approved by the board of directors of each company and is expected to close in the third quarter of 2004. If the government approves the deal, InstallShield gets $76 million in cash. An additional $20 million will follow if the company's numbers are as good as Macrovision is counting on.

Once complete, the companies said InstallShield will become part of Macrovision's Software Technologies Group. Macrovision said it plans to continue to develop and support InstallShield's existing product lines.