Stock Market Watch

SRS (SRSL) Labs Surges on Take Over

by ·


Shares of SRS Labs, Inc. (NASDAQ:SRSL) are surging over 38% in morning trade after the company announced that it has entered into a definitive agreement to be acquired by DTS, Inc. (NASDAQ:DTSI) for approximately $148 million in a cash-and-stock transaction.

Under the terms of the deal DTS will acquire all outstanding shares of SRS Labs (SRSL) in a cash-and-stock transaction valued at $9.50 per share, or a total of approximately $148 million in aggregate equity value, including acquired net cash of approximately $38 million as of December 31, 2011. This represents a premium of 38% per share over SRS Labs’ stock price as of the close of trading on April 16, 2012.

The deal attempts to bring together two highly complementary product and technology portfolios by combining DTS’ suite of audio solutions and SRS Labs’ range of audio processing technologies. The combination is expected to accelerate DTS’ expansion in the rapidly growing markets for mobile and other network-connected devices, while significant operating, customer and licensing cost efficiencies are expected to be realized.


“This transaction represents an exciting extension of our strategic focus on the compelling long-term opportunities being driven by cloud-based entertainment delivery and the proliferation of connected devices, enabling DTS to accelerate our expansion in the key growth areas of mobile and other network-connected device markets, as well as to drive innovation and create significant near- and long-term value for our shareholders,” said Jon Kirchner, DTS’ chairman and CEO. “SRS Labs and its strong portfolio of audio processing technologies are a natural strategic fit for DTS, with complementary technologies, robust anticipated customer synergies, and significant economies of scale. This transaction will accelerate DTS’ delivery of compelling end-to-end solutions to a broad base of customers, enable even higher levels of service, and provide the Company with a solid platform for continued growth.”

“We are pleased to provide our shareholders an attractive premium,” said Thomas C.K. Yuen, SRS Labs’ chairman, CEO and president. “As consumers increasingly demand higher quality audio experiences everywhere from their mobile devices to their homes, this combination benefits our customers and employees by creating significant scale and penetrating new markets. We look forward to making the collective resources of a larger company available to our customers around the world, who will also benefit from superior customer service.”

 

More Posts by this author

edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


Tags:

Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

You may also like...