May 31, 2007

On2 Technologies To Acqure Hantro Products, Maker of Embedded Video Technology

Tarrytown, N.Y. - On2 Technologies Inc., maker of video compression software and solutions, has entered into a definitive agreement to acquire Finland-based Hantro Products Oy, a provider of video technology for mobile devices.
The acquisition is intended to accelerate the deployment of On2’s technology on semiconductor chipsets that power mobile and embedded devices. Hantro provides optimized video compression implementations for mobile, digital consumer-electronics, and IPTV devices. The company’s customers include Nokia, Freescale, LSI, Vimicro, Sanyo, and more than 20 other leading global device and semiconductor manufacturers.  
Hantro’s technology has been implemented on more than 200 million devices to date and in mobile phones produced by 5 of the top 6 handset manufacturers. Hantro is recognized as the market leader in wireless video intellectual property as measured in revenue, number of shipped devices, and number of customers.
Under the terms of the agreement, On2 will acquire Hantro in a share exchange directly with the holders of all of Hantro’s equity securities for a combination of cash and shares of On2’s common stock, par value $.01 per share. The cash component of the acquisition price is approximately $6,800,000.
As a result of the On2 acquisition, the combined company will have a portfolio of optimized VP6 and VP7 codecs and standards-based video compression technologies. The combined company will continue to support Hantro’s customers with Hantro’s multiformat hardware video IP products. The combined company will offer a full range of products and capabilities for video applications ranging from very low data rates to high-definition video across wWb, embedded devices, consumer devices, and mobile/Wi-fi applications.