Optibase Ltd., a developer of digital video solutions, announced that it has entered into an asset purchase agreement with Optibase Technologies Ltd., a wholly owned subsidiary of VITEC Multimedia ("Vitec"). Under the terms of the agreement, Optibase will sell its entire video business to Vitec.
The transaction, which was approved by the Board of Directors of both companies, will result in Vitec paying Optibase an aggregate amount of US $8 million in cash, of which US $1 million will be deposited in escrow for a 2-year period as a security for breach or material inaccuracy relating to Optibase's representations and warranties. Optibase and Vitec also agreed on an earn-out mechanism by which Vitec will pay 45% of revenues deriving from the acquisition exceeding $14 million to Optibase in the year following the closing of the deal. The sale is expected to close during the second quarter of 2010, pursuant to the satisfaction of various terms and agreements.