Dolby Labs Acquires GE Licensing for $429M

Dolby Laboratories, Inc. has announced its definitive agreement to acquire GE Licensing, an intellectual property licensing business primarily targeting the consumer digital media and electronics sectors, in a $429 million all-cash transaction. The acquisition is expected to strengthen Dolby's licensing businesses and create opportunities for future growth.

The transaction includes a portfolio of over 5,000 patents, including foundational patents in standard essential video compression. This acquisition will complement, strengthen, and expand the scale of Dolby's intellectual property portfolio, particularly in the area of video codec technology such as HEVC and VVC.

Dolby expects the deal to be accretive on a non-GAAP basis to operating margins and EPS in fiscal 2025. However, the company does not anticipate this transaction to have a material impact on its fiscal year 2024 results. It also does not expect the acquisition to affect its practice of returning capital to stockholders through its quarterly dividend and stock repurchases to offset dilution from stock-based compensation.

This acquisition represents a compelling financial profile of durable, high-margin revenue for Dolby, and the deal is expected to close by the end of fiscal year 2024, subject to regulatory approval and other customary closing conditions.

GE Aerospace, the seller of GE Licensing, will retain its portfolio of intellectual property related to its core aerospace and defense technologies, as well as the trademark portfolio for the GE brand.

Dolby Laboratories, based in San Francisco, California, is a leader in immersive entertainment experiences and partners with artists, storytellers, developers, and businesses to revolutionize entertainment and communications with technologies such as Dolby Atmos, Dolby Vision, Dolby Cinema, and Dolby.io. GE Aerospace is a global aerospace propulsion, services, and systems leader with a global team of 52,000 employees. Following these announcements, the company's shares moved -0.2%, and are now trading at a price of $79.8. For the full picture, make sure to review Dolby Laboratories's 8-K report.

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