Google To Acquire On2 Technologies Through A Stock-For-Stock Transaction

Posted Aug 5, 2009

Google has announced that they plan to acquire On2 Technologies Inc. (AMEX:ONT) for $108 million.  As part of the agreement, each of On2’s outstanding shares will be converted into $0.60 worth of Google class A common stock in a stock-for-stock transaction.  This places the transaction at a value of $106.5 million.

On2 develops advanced video compression technology that is used on billions of PCs and other devices around the world.

“We’re thrilled that On2 is joining one of the world’s most innovative companies,” stated interim CEO of On2 Matt Frost. “After intensive review of On2 products, Google confirmed our long-held beliefs as to the quality of our video technologies. This transaction is a testament to the hard work of every On2 employee and the strongest possible endorsement of our products and people. On2 will continue to improve, support and sell our products throughout the transition. We believe that Google shares our ambitions and know that our products and expertise, combined with Google’s globally recognized brand, ingenuity and resources, will create an incredible team.”

Wilson Sonsini Goodrich & Rosati and Potter Anderson & Corroon served as Google’s legal counsel on the transaction.  Credit Suisse provided M&A advisory help to Google.  Covington Associates LLC acted as a financial adviser for On2.  The transaction is subject to approval from stockholders and is expected to close in 4Q 2009.