Digital TV recorder developer ReplayTV Inc. has found a buyer to save itself from bankruptcy, the company announced Thursday. Digital media technology firm Sonicblue Inc. has signed a letter of intent to acquire ReplayTV and merge its recorders into SonicBlue’s product line, for some US$121 million in stock.
“These two acquisitions will accelerate the realization of our vision and substantially provide us with the tech resources, IT and channels necessary to achieve a leadership position,” Ken Postashner, chief executive and chairman of Sonicblue, said in a conference call Wednesday.
Sonicblue, is best known for its other entities which include Rio, which makes MP3 players and Diamond Internet access products. In exchange for 16 million shares of Sonicblue common stock, options and warrants, ReplayTV will become a wholly owned subsidiary of Sonicblue, pending stockholder approval.
The sale came only after Replay could not pull itself out of its financial problems. Replay has faced tough competition from competitors such as TiVo, which has leveraged its product by partnering with more electronics manufacturers such as Philips.
The digital video recording market has been slow to grow and gain consumer acceptance. Recent surveys show only about 100,000 Americans own a Replay or TiVo device.
Faced with slow sales of its ReplayTV digital video recording product, the company changed directions last November and became a technology provider to cable operators, who will add the hard drive functionality to future cable settop boxes.