Optibase Sells its Video Business to a Subsidiary of VITEC Multimedia

March 16, 2010

Source: Optibase

Optibase Ltd., a provider 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") pursuant to which Optibase Ltd. and its subsidiary Optibase Inc. (collectively, "Optibase") will sell their entire video business to Vitec (the "Business" and the "Transaction", respectively).

Under the terms of the transaction, which was approved by the Board of Directors of both companies, in consideration for the sale of the Business, Vitec will pay the Company 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, inter alia, for breach or material inaccuracy relating to Optibase's representations and warranties. In addition, Optibase and Vitec agreed on an earn-out mechanism pursuant to which 45% of Vitec's revenues deriving from the Business exceeding $14 million in the year following the closing of the Transaction will be paid to Optibase.

Consummation of the Transaction is subject to the fulfillment of certain conditions precedent standard for transactions of this nature, including, inter alia, receipt of all necessary approvals and permits and the Company’s shareholders’ approval. The Transaction is expected to close during the second quarter of 2010. However, there is no assurance that the parties will be able to satisfy the conditions precedent to the Transaction by the time set in the agreement or at all.

Upon signing of the Transaction, Vitec deposited US $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, principally relating to non fulfillment of certain closing conditions by Optibase, in which case, such funds will be returned to Vitec.

“Following an offer from Vitec, we have decided to pursue this opportunity as we believe that Vitec is the right company to ensure the continuity of the business in its existing markets as well as maintaining the Optibase brand”, commented Tom Wyler, President & Chief Executive Officer of the Company. “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 I’m sure that it will continue this course in its new form.”

"We are delighted to be a part of this significant agreement. The two pioneers in the Digital Video domain merge forces, thus providing the most complete offering on the market. We will continue to develop the growing Optibase markets such as the enterprise and IPTV markets and their related products, and support the needs of current and future customers” commented Philippe Wetzel, President & CEO of VITEC Multimedia. “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."




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