Nvidia Agrees To Buy PortalPlayer For $350 Million

PortalPlayer (San Jose, Calif.) was able to perform an IPO on the strength of its Apple iPod design win but suffered subsequent setbacks. Nonetheless Nvidia (Santa Clara, Calif.) has agreed to pay $13.50 in cash for each outstanding share of PortalPlayer common stock, which represents a total purchase price of approximately $357 million, or approximately $161 million net of cash on PortalPlayer's balance sheet as of Sept. 30, 2006.

The purchase price represents approximately a 19 percent premium to the 20-day average closing price of PortalPlayer through Friday, November 3, 2006. This acquisition has been approved by the Board of Directors of each company and is subject to regulatory approvals and other customary closing conditions.

"Modern mobile devices are miniaturized yet powerful multimedia computers. At the core of their architectures are complex application processors integrating microprocessors, system logic, networking, and multimedia processors," said Jen-Hsun Huang, president and chief executive officer of Nvidia, in a statement. "With this acquisition, we are combining the two essential technologies of next-generation PMPs, PDAs, portable game players, and phones: PortalPlayer's innovative application processor technology and Nvidia's industry-leading GPU technology. With the products created through this combination, we intend to drive the next digital revolution, where the mobile device becomes our most personal computer."

"We have spent the past several months extensively exploring our strategic options. We feel the advantages offered by the Nvidia acquisition are the most compelling, and that our customers and employees will benefit from Nvidia's strong position in handheld GPU technologies and its vast resources and global reach," said Richard Sanquini, chairman of the PortalPlayer board of directors, in the same statement.