NeuLion Enters Into Purchase Agreement With An Affiliate of Fortress Investment Group To Sell Certain DivX Assets, Intellectual Property and Subsidiaries for Cash Consideration of $41.5 Million
PLAINVIEW, NY – 12/19/2017 - NeuLion, Inc. (TSX:NLN), a leading technology product and service provider that specializes in the digital video broadcasting, distribution and monetization of live and on-demand content to Internet-enabled devices, today announced that on December 18, 2017, it entered into an agreement to sell certain DivX assets, intellectual property and subsidiaries to an affiliate (“Fortress”) of Fortress Investment Group LLC (NYSE:FIG).
The company will sell to Fortress certain DivX assets, intellectual property and subsidiaries that are not core to NeuLion’s focus on the over-the-top (“OTT”) market. NeuLion expects that the transaction will provide it with lower operating costs and provide capital that the company can leverage as it expands its presence in the global OTT arena.
As the OTT market continues to expand globally, NeuLion is perfectly positioned to take advantage of these new opportunities with its OTT technology and services enabled by the NeuLion Digital Platform, including the consumer electronics 4K market with its NeuLion CE SDK, and the video compression H.265 market, powered by the MainConcept line of CODEC tools. NeuLion technology and services provide its customers with an end-to-end platform, solutions that enable digital content management, distribution and monetization across the entire video ecosystem - content owners, content creators and consumers.
Pursuant to the Purchase Agreement, NeuLion will sell certain DivX assets, intellectual property and subsidiaries to Fortress for cash consideration of $41.5 million, subject to adjustment as specified in the Purchase Agreement. These assets accounted for approximately $15.0 million and $20.7 million of the company’s consolidated GAAP revenues for the nine months ended September 30, 2017 and the year ended December 31, 2016, respectively. NeuLion also expects to significantly reduce employee headcount across various departments of the company that have been assigned to DivX. The transactions contemplated by the Purchase Agreement are expected to close during Q1 2018.