The need to reduce motion blur on LCD TVs has driven the introduction of 120Hz panels and the development of Motion Compensated Frame Rate Conversion ("MCFRC") solutions. In addition, studio movie content, including Blu Ray content, uses 24 images per second, which requires conversion to 60 or 120Hz for best viewing quality. Let It Wave's unique and proprietary MCFRC technology is designed to produce sharper images and reduce judder by creating additional frames using its superior Bandlet technologies. With its multi-scale geometrical processing, the solution robustly determines the direction of motion regularity, overcoming the limitations of traditional block-search algorithms. By acquiring Let It Wave, Zoran intends to deliver high-performance image processing that enables artifact-free true-MCFRC for flat panel televisions as well as other video consumer electronics products.
"With this acquisition we believe we can drive the rapid adoption of 120Hz processing into the mainstream DTV market," said Ram Ofir, senior vice president and general manager, Home Entertainment division at Zoran. "By combining the Let It Wave team with our own highly qualified team of video and image processing engineers, we believe we can deliver the highest-quality video solutions to multiple fast-growing consumer electronics markets. Our immediate target market with this technology will be 120Hz LCD TVs, which industry analysts are currently forecasting to reach approximately 30 million units shipped in 2010, growing to 40 million units by 2012. We expect to have the first samples of our MCFRC solution available for customer integration by the end of this year."
"Our innovative approach to video processing yields outstanding video quality without the common artifacts introduced by current state-of-the-industry motion adaptive and motion compensated technologies," said Professor Stephane Mallat, Let It Wave chairman and co-founder. "Instead of relying on a single motion computation per pixel, bandlet algorithms perform a full spatio-temporal analysis of the video to perform advanced geometrical interpolations and filtering, which avoids blurring, ghosting and shadowing artifacts. Television viewers immediately see improved image quality on sets using this technology."
Let It Wave was founded in 2001 by Professor Stephane Mallat, Dr. Christophe Bernard, Dr. Jérôme Kalifa, and Professor Erwan Le Pennec to develop improved image-processing capabilities for video products based on Bandlet technology at Ecole Polytechnique in Paris. In 2002, the company won the first national prize for innovation awarded by the French ministry of Research and Technology and also won the prestigious 2005 European Information Science Technology Grand Prize, a competition involving entrants from 29 European countries. Let It Wave was financed primarily by Iris Capital, a pan-European fund, and I-Source, France.
Under the terms of the agreement, Zoran will acquire Let It Wave in an all cash transaction valued at up to $27.6 million, which includes earnout provisions. Zoran believes that the transaction will be accretive on a non-GAAP basis no later than the second half of 2009, with minimal impact to its earnings for the remainder of 2008 on a non-GAAP basis. The acquisition is expected to close on or about June 11, 2008.
About Zoran
Zoran Corporation, based in Sunnyvale, California, is a leading provider of digital solutions for applications in the growing digital entertainment and digital imaging markets. With two decades of expertise developing and delivering digital signal processing technologies, Zoran has pioneered high-performance digital audio, video, imaging applications and Connect Share Entertain technologies for the digital home. Zoran's proficiency in integration delivers major benefits for OEM customers, including greater capabilities within each product generation, reduced system costs, and shorter time to market. Zoran-based DVD, digital camera, DTV, multimedia mobile phone, and multifunction printer products have received recognition for excellence and are now in hundreds of millions of homes and offices worldwide. With headquarters in the U.S. and additional operations in Canada, China, England, Germany, India, Israel, Japan, Korea, and Taiwan, Zoran may be contacted on the World Wide Web at www.zoran.com or at (408) 523-6500.
Forward-Looking Statements
This press release includes a number of forward-looking statements, including Zoran's views about future demand for consumer electronic products, Zoran's plans for the Let it Wave technology and products, the intended benefits of the acquisition, the projected market size for products containing the acquired technology, the projected accounting impact of the acquisition, and the projected closing date of the transaction and the material presented in quotations. These forward-looking statements are subject to many risks and uncertainties that could cause actual results to differ materially from what is projected. These risk factors include potential difficulties integrating the operations, technologies and products of Let It Wave with our operations, unexpected developments in market demand for our products or those of our competitors, our reliance on independent foundries and contractors for our wafer supplies and product assembly and testing; unpredictable research and development expenses; our dependence on a limited number of key personnel; the international nature of our operations, particularly our operations in Israel; the possibility that the transaction doesn't close due to the failure of one or more conditions precedent or other issues, the effects of changing economic conditions on the consumer markets that we serve and the other factors described under the caption "Risk Factors" and elsewhere in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. Further information about these and other risks and uncertainties we face can be found in our filings with the Securities and Exchange Commission. This release speaks only as of the date of issuance and we undertake no obligation to update any information, including forward-looking information, after the date hereof.