DTS (Digital Theater Systems, Inc.) (NASDAQ: DTSI) today announced that it has acquired Lowry Digital Images (LDI), a privately held company and a leader in image restoration and enhancement. This transaction substantially extends DTS' business to include image technology and services that support content creation and delivery in both the theatrical and consumer markets.
A Burbank, California-based technology developer and service provider, LDI is a leader in restoring and enhancing moving pictures, whether captured on film or in digital form. LDI uses highly advanced, proprietary image processing algorithms designed to improve picture quality and resolution and to remove unwanted artifacts. LDI's founder, John Lowry, is a long-time image specialist who first gained industry recognition for his work on images transmitted from the moon during the Apollo 16 and 17 missions in the 1970s. Since its inception in 2000, LDI has processed nearly 100 of the world's most recognized feature films for output to broadcast television, DVD, 35mm film and IMAX â presentations.
The acquisition positions DTS to expand its role as an essential technology provider for high quality audio and video entertainment. By supporting high-definition content creation, delivery and playback, management believes that DTS is well-positioned to participate in and capitalize on the accelerating trend to higher-quality picture and sound delivery for digital cinema, next generation discs and broadcast. DTS' brand, its leadership position in the theatrical and consumer markets, and its global infrastructure are expected to help bring LDI services and technology to a broader base of customers.
DTS paid approximately $11.0 million in cash to acquire all outstanding LDI shares. DTS will be required to issue up to 857,000 shares of its common stock to former LDI stockholders in the event LDI meets specified performance criteria during 2005 and 2006. LDI is expected to generate revenues of approximately $10 million and be accretive to earnings in 2005.
“The acquisition of Lowry Digital Images represents DTS' commitment to delivering a full range of best-in-class technologies and services designed to enhance the entertainment experience,” said Jon Kirchner, President and CEO of DTS. “With this expanded breadth of business going forward, DTS is poised to lead the accelerating industry transition to high definition sound and images for D-Cinema, broadcast, and the emerging HD-DVD and Blu-ray Disc formats."
“There is an inherent synergy between LDI and DTS. We serve the same base of clients, we are focused on enabling the best possible entertainment experience, and we recognize the market's interest in ever higher quality image and sound technology,” said John Lowry. “We are excited about the potential for growth in our markets and believe that this transaction will help to leverage and accelerate our progress.”