A New Owner for iBiquity Digital
This article has been expanded with more information about the two companies and their corporate histories.
DTS has entered
into an agreement to acquire iBiquity Digital Corp. for $172 million.
IBiquity is the developer of HD Radio technology, which is the
basis of in-band digital radio transmissions in the United States and in some
“DTS expects to finance the transaction
through a combination of cash on hand and debt,” the company said.
The transaction is expected to close later this year and is
subject to closing conditions. iBiquity is a privately held company based in
Columbia, Md., with approximately 120 employees. After closing, Bob Struble
will continue to lead the HD Radio business for DTS.
In making the announcement, DTS stated, “iBiquity has very successfully
driven penetration of HD Radio technology in the North American automotive OEM
market. Every one of the 36 major auto brands serving the U.S. market offers HD
Radio technology on some of their vehicles, many as standard equipment. The company’s
technology was built into approximately 35% of cars sold in the U.S. in 2014,
and DTS expects the majority of North American vehicles to come equipped with
HD Radio technology over time. The combination is also expected to provide
opportunities for additional geographic, service and technology expansion.”
The announcement was made by Jon Kirchner, chairman and
CEO of DTS, and Bob Struble, president and CEO of iBiquity. Struble called DTS “a
like-minded partner” and said “our employees and customers, who will benefit
from the additional scale and enhanced resources of a larger collective
According to a corporate history, DTS was founded in
1990 by entrepreneur/scientist Terry Beard and has its roots in the world of
sound for motion pictures, dating to the installation of DTS playback systems
in theaters in the days of “Jurassic Park.” Film studios use its multi-channel digital
sound. The company got into consumer products with a scalable digital audio
architecture called DTS Coherent Acoustics, used in home theater and car audio
products, video games and other systems. In 2000, the company began selling DTS
hardware and software encoders to content providers. Recording artists,
producers and engineers use its multi-channel sound technology.
In 2012, DTS
acquired SRS Labs, which makes audio processing and enhancement, as RW reported
then. Corporate headquarters are in Calabasas, Calif. And licensing operations in
IBiquity Digital has its roots in efforts by
commercial U.S. broadcasters to explore digital in the late 1980s and early
1990s. CBS, Gannett, and Westinghouse formed USA Digital Radio in 1991; it used an in-band on-channel (IBOC) approach, which was marketed as a way for
radio stations to move toward digital on their existing spectrum and on their own
timeframe via a “hybrid” approach in which digital and analog signals coexist (until such time as the industry might choose to turn off analog, if ever).
USADR became a separate company in 1998,
with backing from 15 broadcast groups; according to a company history, two
years later it secured $40 million in additional funding from strategic
partners and venture capital firms (see timetable of its early corporate development, right, in an image from the iBiquity website). It later merged with Lucent Digital Radio
in 2000, forming iBiquity Digital Corp.
Its HD Radio technology has been controversial within radio over the years, and most of its penetration has been in the FM dial, with only partial uptake among U.S. broadcasters; the AM efforts were sidetracked by interference problems, especially at night. But the technology also has brought multicast channels to FM broadcasters and provided a data capacity that backers say adds to the radio platform's appeal. In recent years, iBiquity has focused its marketing efforts on growing the number of vehicles that have HD Radio receivers, seeking to make the technology as standard as possible in the car environment.
Struble Says DTS Brings Stable, Long-Term Ownership
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