NeuLion Inc., a Plainview online broadcasting company, has reached an agreement to acquire San Diego video software maker DivX for $62.5 million.
The Long Island technology company, which trades on the Toronto Stock Exchange, said the move will bolster its ability to provide on-demand digital video. "It's a big move for us into 4K video -- that's four times the quality of HDTV," NeuLion executive vice president Chris Wagner said.
Wagner co-founded the company in 2004 with a team that included Nancy Li, who has been chief executive since 2008. Li's husband, Charles Wang, co-founded CA Technologies and is chairman of NeuLion's board.
Last year, NeuLion broadcast roughly 50,000 live sports events. Its stock market value is roughly $245 million.
After acquiring DivX, NeuLion will have roughly 570 employees, including 125 at its Plainview headquarters.
Li will become executive vice chairman of NeuLion's board of directors and oversee the company's technology strategy. Kanaan Jemili, DivX's chief executive, will replace Li as NeuLion's CEO.
NeuLion will finance the transaction with $37.5 million in shares of common stock and a $25 million two-year convertible note. The deal, announced Monday, is scheduled to close by April.
NeuLion shares fell 4 cents, or 2.9 percent, to close at $1.36 in trading in Toronto Tuesday. The stock has more than doubled in the past 12 months.