Dolby Laboratories Announces Agreement to Acquire GE Licensing from GE Aerospace
Dolby Laboratories (NYSE: DLB) announced an agreement to acquire GE Licensing from GE Aerospace for $429 million in cash. The acquisition, which includes over 5,000 patents in video codec technology, aims to strengthen Dolby’s licensing business and foster future growth. GE Aerospace will retain its aerospace and defense IP portfolio. The transaction is expected to close by the end of fiscal 2024, subject to regulatory approval, and is anticipated to be accretive to Dolby’s operating margins and EPS in fiscal 2025. This deal will not impact Dolby's dividend or stock repurchase practices.
- Agreement to acquire GE Licensing for $429 million in cash.
- Acquisition includes over 5,000 patents, enhancing Dolby's IP portfolio.
- Expected to be accretive to operating margins and EPS in fiscal 2025.
- Transaction to close by the end of fiscal 2024.
- No impact on Dolby's dividend or stock repurchase practices.
- Strengthens Dolby’s licensing business, particularly in video codec technology.
- Deal requires regulatory approval, which may delay closing.
- Transaction will not materially impact fiscal year 2024 results.
Insights
The acquisition of GE Licensing by Dolby Laboratories represents a significant strategic move. The all-cash transaction valued at
This acquisition aligns with Dolby's existing licensing businesses, expanding its intellectual property portfolio with over 5,000 patents. This move could enhance Dolby’s competitive edge in the market by reinforcing its position in video codec technology. Additionally, the company continues its commitment to returning capital to shareholders through dividends and stock repurchases, signaling confidence in its ongoing financial strength. Importantly, investors should consider the regulatory and closing conditions that may impact the deal's finalization.
Dolby's acquisition of GE Licensing significantly bolsters its technology portfolio, especially in the realm of video codec technologies such as HEVC and VVC. These technologies are important for efficient video compression, which is essential for streaming services, broadcasting and other digital media applications. By acquiring these patents, Dolby not only strengthens its position as a leader in video technology but also ensures it has the necessary intellectual property to support next-generation video standards.
This acquisition could have long-term benefits for Dolby, enabling the company to potentially influence industry standards and maintain a competitive edge in a rapidly evolving market. For investors, understanding the implications of this technological enhancement is key, as it positions Dolby to better serve its partners and customers by providing cutting-edge solutions that improve video quality while reducing bandwidth requirements.
Acquisition to strengthen Dolby's licensing businesses and create opportunity for future growth
As one of the most respected companies in the field of patent licensing and management, GE Licensing is a leading innovator with world-class patents and licensing expertise, especially with respect to pioneering video codec technology. The transaction will include a portfolio of over 5,000 patents, including foundational patents in standard essential video compression. GE Aerospace will retain its portfolio of IP related to its core aerospace and defense technologies, as well as the trademark portfolio for the GE brand.
"GE Licensing is home to a number of essential innovations that power the modern world" said Andy Sherman, Dolby Executive Vice President, Patent Licensing and General Counsel. "An important part of Dolby's strategy is providing value to our customers, partners, and the industry through open standards and collaborative pool licensing. This acquisition gives us the opportunity to continue to promote and support innovation within our ecosystems."
This acquisition is an extension of Dolby's existing licensing businesses. GE Licensing's portfolio of video codec technology, such as HEVC and VVC, complement, strengthen, and expand the scale of Dolby's intellectual property portfolio. Dolby is committed to continuing to facilitate the adoption of next-generation standardized technologies – enabling industry efficiency, continuity, and growth.
"Dolby is a trusted leader and innovator with a long history in licensing technologies and patents through collaborative structures," said Robert Giglietti, GE Aerospace's CEO of Corporate Holdings and Treasurer. "As GE Aerospace continues to sharpen its focus as a standalone company serving aerospace and defense customers, Dolby is the right partner for ensuring these innovative digital media technologies continue to serve businesses and consumers around the world."
Financial Considerations
Dolby Laboratories has agreed to acquire GE Licensing, an intellectual property licensing business primarily targeting the consumer digital media and electronics sectors, in a
This transaction is not expected to affect Dolby's practice of returning capital to stockholders through its quarterly dividend and through stock repurchases to offset dilution from stock-based compensation.
About Dolby Laboratories
Dolby Laboratories (NYSE: DLB) is based in
About GE Aerospace
GE Aerospace (NYSE: GE) is a global aerospace propulsion, services, and systems leader with an installed base of approximately 44,000 commercial and 26,000 military aircraft engines. With a global team of 52,000 employees building on more than a century of innovation and learning, GE Aerospace is committed to inventing the future of flight, lifting people up, and bringing them home safely. Learn more about how GE Aerospace and its partners are defining flight for today, tomorrow and the future at www.geaerospace.com.
Forward-Looking Statements
This press release contains forward-looking information related to Dolby and Dolby's proposed acquisition of the intellectual property licensing business of General Electric (the "Licensing Business"), that involves substantial risks, uncertainties, and assumptions that could cause actual results to differ materially from those expressed or implied by such statements. When used in this press release, words such as "enables", "intends", "will", "expects", and similar expressions and any other statements that are not historical facts are intended to identify forward-looking statements. Forward-looking statements contained herein may include, among other things, statements about the potential benefits and financial implications of the proposed transaction, the potential impact of the proposed transaction on Dolby's practices regarding quarterly dividends and share repurchases, Dolby's plans, objectives, expectations, and intentions regarding the Licensing Business and the assets that comprise the Licensing Business, and the anticipated timing of closing of the proposed transaction. Risks and uncertainties include, among other things, risks related to the ability of Dolby to consummate the proposed transaction on a timely basis or at all; Dolby's ability to secure regulatory approvals on the terms expected, in a timely manner or at all; Dolby's ability to successfully integrate the Licensing Business's operations; Dolby's ability to implement its plans, forecasts, and other expectations with respect to the Licensing Business and the assets that comprise the Licensing Business after the completion of the transaction and realize expected synergies; the ability to realize the anticipated benefits of the proposed transaction, including the possibility that the expected benefits from the proposed transaction will not be realized or will not be realized within the expected time period; disruption from the transaction making it more difficult to maintain business and operational relationships; risks related to diverting management's attention from Dolby's ongoing business operations; potential negative effects of the announcement or the consummation of the proposed transaction on the market price of Dolby's Class A common stock or on Dolby's operating results; significant transaction costs; unknown liabilities; the risk of litigation or regulatory actions related to the proposed transaction; and the effect of the announcement or pendency of the transaction on Dolby's or the Licensing Business's relationships, operating results, and business generally.
Further information on these and other risks and uncertainties relating to Dolby can be found in its reports and other filings Dolby makes with the Securities and Exchange Commission (the "SEC") from time to time and available at www.sec.gov. Copies of documents filed with the SEC by Dolby (when they become available) may be obtained free of charge on Dolby's website at https://investor.dolby.com. The forward-looking statements included herein are made only as of the date hereof. Dolby disclaims any obligation to update these forward-looking statements, except as required by law.
Press Contacts
Dolby Laboratories
Peter Drummond
201.213.2221
dolby@berlinrosen.com
GE Aerospace Media Contact
Nicole Sizemore
203.945.9783
nicole.sizemore@ge.com
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SOURCE Dolby Laboratories, Inc.
FAQ
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