Optibase Ltd. to Acquire Viewgraphics
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Optibase, Ltd. Monday announced it will acquire Viewgraphics, Inc., a provider of hardware and software solutions used for the manipulation and transmission of broadcast-quality digital video over broadband networks. These solutions are used for applications such as interactive TV, video-on-demand and datacasting.
The acquisition is intended to push the adoption of Optibase's Media Gateway solutions into the broadband networking market. Jack Krooss, founder and CEO of Viewgraphics, will join Optibase's Board of Directors and assume a top management position. By adding Viewgraphics' 43 employees to its U.S. subsidiary, Optibase will also secure the talents of an engineering team in Silicon Valley with expertise in digital video manipulation and transport technology.
"Today's announcement signifies an important inflection point in Optibase's history," remarked Ran Eisenberg, Chairman and CEO of Optibase Ltd. "Since its inception, Optibase has been at the forefront of digital video technology, continuously pushing the envelope of video-based applications. Today's announcement takes this critical role one step further by leveraging our depth of experience in digital video to encompass transport technology. This will bring us closer to being an end-to-end provider of digital video solutions for broadband networks. Viewgraphics' products for digital media transmission and conversion complement Optibase's core technologies and product offerings. In addition to expanding our product line, we are taking on a team of highly skilled engineers who bring value-added expertise in the media streaming space. Furthermore, the acquisition will broaden Optibase's reach by increasing its presence in the U.S., closer to some of its key customers."
"Viewgraphics brings a set of key assets which are important to the execution of our Media Gateway strategy," Mr. Eisenberg also remarked. "The Viewgraphics technologies, in the fields of protocol conversion, such as DVB (Digital Video Broadcasting) to IP, and its splicing capabilities, which enable local content insertion, complement Optibase's transcoding technologies. Viewgraphics' solutions are used today by industry leaders such as SeaChange International, for its video servers for the broadcast market; OpenTV and Liberate for their interactive TV infrastructure platforms; and Worldgate for use in their television-based Internet gateways."
Viewgraphics and Optibase share a common vision to drive the growth of the Internet through convergence-based applications including interactive digital television and video on demand, said Jack Krooss, CEO and founder of Viewgraphics. "Optibase's core expertise in digital video streaming solutions, combined with our transport technology, will enable us to realize the great potential of Internet-based video applications. We are very excited about the opportunity to join forces with Optibase and look forward to building the next generation video networking products."
"The acquisition of Viewgraphics brings with it technological, strategic and financial synergies," Mr. Eisenberg concluded. "The integration of Viewgraphics will be seamless as each of our technologies and products are complementary on several levels. Given the cross-selling opportunities and economies of scale that exist, we expect the transaction to be accretive to earnings in the first full year of the combination, measured on a pro forma operating basis, excluding acquisition-related charges including goodwill and compensation expenses."
Under the terms of the agreement, Optibase will first purchase all of Viewgraphics Intellectual Property. Optibase will then acquire all of Viewgraphics' outstanding shares, options and warrants. The aggregate consideration will amount to approximately $30 million in cash and 1.37 million newly issued shares of Optibase's common stock. Optibase will also assume the unvested options of Viewgraphics. W