Nvidia Nabs PortalPlayer in $357M Deal

By Colleen Taylor -- 11/6/2006

Programmable graphics technology company Nvidia Corp. has inked a definitive agreement to acquire San Jose -based PortalPlayer Inc. for a total purchase price of $357 million.

PortalPlayer, a supplier of semiconductors, firmware and software for personal media players, has been hurting since Apple Computer Inc. announced earlier this year that PortalPlayer's chips would no longer be used in the iPod. Until then, PortalPlayer had derived 90 percent of its revenue from its iPod business. In June, PortalPlayer announced plans to slash 45 jobs in an effort to recover from the loss. 
        
Under terms of the agreement, Nvidia will pay $13.50 in cash for each outstanding share of PortalPlayer common stock, which represents a total purchase price of approximately $357 million, or approximately $161 million net of cash on PortalPlayer's balance sheet as of September 30.

"We are excited about the next chapter in our corporate history," Richard Sanquini, chairman of PortalPlayer's board of directors, said in a statement. "We have spent the past several months extensively exploring our strategic options."

The acquisition has been approved by the board of directors of each company and is subject to regulatory approvals and other customary closing conditions, Nvidia said. The company gave no timeline for the deal’s closing, only saying more information would be available on its quarterly conference call this Thursday.

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