Corel Acquires InterVideo for $196M
Corel on Monday announced an agreement to acquire multimedia software publisher InterVideo, most known for its WinDVD lineup, in an all-cash deal valued at $196 million. The move expands Corel's portfolio into video editing and DVD creation.
With its office products largely reaching their peak amid increasing competition from OpenOffice.org, Corel has endeavored to shift its software business into multimedia. The company acquired JASC Software and its popular Paint Shop Pro offering in 2004 and is readying a new imaging platform code-named "Alta."
Through the acquisition, Corel gains the WinDVD player and WinDVD Creator, which both recently added support for HD DVD and Blu-ray. In addition, thanks to InterVideo's merger with Ulead in July, Corel will also add to its product lineup Ulead Photo Impact, UleadVideoStudio and Ulead DVD Movie Factory.
"With outstanding products, talented employees and deep relationships with eight of the world's top ten PC manufacturers, InterVideo represents a significant opportunity for Corel to deliver enhanced value to our shareholders," remarked Corel CEO David Dobson. "This acquisition will also benefit customers and partners as we expand our ability to provide flexible, bundled solutions that meet the needs of today's digital media consumers."
InterVideo's partnerships with computer makers is a key factor in the deal says Jupiter Research senior analyst Joe Wilcox.
"InterVideo's DVD playback software is broadly bundled with new PCs. The company also has OEM deals for some of its other video software. If the folks at Corel are smart, they'll leverage some of these relationships for extending the OEM reach of other products, like WordPerfect, Painter, the forthcoming Alta or WinZip (yeah, the company bought the compression software in May)," explained Wilcox.
Corel is now competing directly with Sonic Solutions, which Wilcox notes has a both a strong retail and OEM presence. The acquisition is expected close in the fourth quarter of this year.