Optibase Sells Video Business to Vitec Multimedia

Deal valued at $8 million cash
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HERZLIYA, ISRAEL: Optibase today agreed to sell its remaining video business to Vitec Multimedia, a video compression specialist in Chatillon, France. (This Vitec does not appear to be part of the Vitec Group of camera support companies.)

Under deal terms approved by the board of directors of both companies, Vitec will pay the Optibase $8 million in cash of which $1 million will be deposited in escrow for a two-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 percent of Vitec’s revenues deriving from the Optibase exceeding $14 million the year after the deal closes will be paid to Optibase.

Vitec deposited $500,000 in escrow to be paid to Optibase if the deal doesn’t go down within an undisclosed timeframe, barring nonfulfillment by Optibase. The transaction is expected to close during the second quarter pending shareholder and regulatory approval

“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,” said Tom Wyler, president and CEO of Optibase.

Shares of Optibase (NASDAQ) rose 16 percent on the news to $1.46. The company diversified into real estate last year, and will retain that division of the business.

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