Optibase Ltd. (News - Alert), a provider of advanced digital video solutions, has entered into an asset purchase agreement with Optibase Technologies Ltd., a wholly owned subsidiary of VITEC Multimedia. According to the deal, entire video business of Optibase Ltd. and its subsidiary Optibase Inc. will be handed over to Vitec. 

Board of Directors of both the companies approved the deal, under the terms of which Vitec will pay the Company an aggregate amount of $8 million in cash of which $1 million will be deposited in escrow for a two-year period as a security for breach or material inaccuracy relating to Optibase’s representations and warranties. Apart from it, according to an earn-out mechanism Optibase will also receive 45 percent of Vitec's revenues deriving from the Business exceeding $14 million in the year following the closing of the Transaction, which is expected to close during the second quarter of 2010. 

Vitec deposited $500,000 in escrow to be paid to Optibase if closing does not take place within a specific period of time from signing, subject to certain limited circumstances. In case of non fulfillment of certain closing conditions by Optibase, these funds will be returned to Vitec. 

According to Tom Wyler, president & CEO at Optibase, following an offer from Vitec, the company decided to pursue this opportunity as it believes that Vitec is the right company to ensure the continuity of the business in its existing markets as well as maintaining the Optibase brand. Wyler continued that as a pioneer and a market leader in the field of digital video, Optibase proved to be a significant player in the market as well as being a greenhouse for such advanced technologies, and the company hopes it will continue this course in its new form. 

Philippe Wetzel, president & CEO of VITEC Multimedia, said in a release that the company is delighted to be a part of this significant agreement, as the merger of the forces of two pioneers in the Digital Video domain will provide the most complete offering on the market. Wetzel noted that VITEC will continue to develop the growing Optibase markets such as the enterprise and IPTV (News - Alert) markets and their related products, and support the needs of current and future customers, and expressed hope that from Advanced Video Streaming and management solutions to Specialized Video Recorders, this joining of forces will introduce a wide array of products and solutions such as MPEG Encoders and Decoders, Smart Cameras, Digital Video converters, IPTV solutions, and much more. 

In February 2009, Optibase announced to enter a new partnership with Applied Video Technology Inc., or “AVT,” a system integration firm focusing on design, procurement, engineering, installation and service of audiovisual, videoconferencing, video streaming and broadcast solutions. The new partnership aimed at enabling AVT to offer Optibase Professional Solutions for Live and On Demand video over IP to U.S. corporations and educational organizations.