Motorola plans to acquire Tut Systems for $39 million in cash and integrate its technology into set-top boxes that deliver Internet TV to the home.
Tut, based in Lake Oswego, Ore., sells digital video encoding, processing, and distribution products that support local ad insertion, real-time conditioning of video and audio, and compression of video in MPEG-2 and MPEG-4 advanced video coding formats, according to Motorola. More than 160 IPTV service providers use Tut's technology.
In combining Tut products with its own, Motorola is hoping to expand its ability to help service providers deploy video services over the Internet, or ATM and radio frequency-based networks. The company claims to have deployed 2,060 digital video networks, and to have sold more than 50 million digital video set tops worldwide.
Motorola said Thursday that it has agreed to pay $1.15 in cash for each share of Tut common stock, which amounts to $39 million. The deal is expected to close in the first quarter of next year, following approval from Tut shareholders and regulators.
Tut is expected to become a wholly owned subsidiary of Motorola, under its Connected Home Solutions business. Motorola plans to maintain Tut's operations in Lake Oswego, and in San Diego and Pleasanton, Calif.