NeuLion shares jump almost 30% after $41.5 million asset sale
Workers at the operations center of NeuLion, an online video streaming company in Plainview. (July 23, 2012) Credit: Steve Pfost
Shares of NeuLion Inc. jumped almost 30 percent Wednesday after the provider of digital video broadcasting technology announced it had reached an agreement to sell some assets and intellectual property of its DivX unit to an affiliate of Fortress Investment Group for $41.5 million.
The stock rose 12 cents to close Wednesday at 53 cents in Canadian currency on the Toronto Stock Exchange. Shares were trading at $1.13 a year ago.
The Plainview company announced the transaction with Fortress, a publicly traded investment company based in Manhattan, after the market closed Tuesday. The deal is expected to close during the first quarter of 2018.
NeuLion acquired San Diego-based DivX LLC in January 2015 for about $62.5 million in stock and convertible securities.
The DivX assets sold accounted for $20.7 million of the company’s revenue for the year ended Dec. 31, 2016.
NeuLion said it expects the transaction to cut its operating costs as it lays off workers in DivX units. The deal also will provide capital to expand globally, the company said.
NeuLion provides an “over-the-top” system for distributing and monetizing digital content for content owners such as the NFL, NBA, Sky Sports and World Surf League.
Over-the-top video bypasses traditional cable and satellite TV packages and delivers programming over the internet.
Ken Schachter covers corporate news, including technology and aerospace, and other business topics for Newsday. He has also worked at The Miami Herald and The Jerusalem Post.
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