Wednesday, August 5, 2009

Google Acquires On2 Technologies

Mountain View-based Google and New York-based On2 Technologies, a developer of video compression technology, said today that the companies are in a definitive agreement where Google will buy On2 for approximately $106.5M. According to the firms, each share of On2 common stock will convert to $0.60 worth of Google class A common stock in a stock swap transaction. The offer is a 57% premium over the closing price of On2's common stock. On2 is developer of the TrueMotion VP7 codec, which is used by Skype for its video conferencing, and the TrueMotion VP6 codec used for Adobe Flash and Flash Video. Google was advised by Wilson Sonsini Goodrich & Rosati, Potter Anderson & Corroon, and Credit Suisse; On2 was advised by Covington Associates, Duff & Phelps, Hogan & Hartson LLP, and Richard Layton & Finger in the transaction.