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Media 100 to buy Digital Origin

The producer of streaming media tools agrees to acquire digital video software developer Digital Origin in a stock deal valued at more than $83 million.

Media 100, continuing its expansion in the streaming media market, has agreed to acquire digital video software developer Digital Origin in a stock deal valued at more than $83 million.

The purchase fills a hole in Media 100's streaming arsenal. Today's announcement marks the third acquisition in the past six months for the Marlboro, Mass., company, which is trying to make a move into the cramped streaming field.

"It's a logical step for Media 100," said Darren Giles, chief technical officer of Terran Interactive, a subsidiary of Media 100. "This was one of the last pieces it needed."

Media 100 has primarily offered high-end video editing tools. Recently, however, it recognized the swelling demand for digital video software and quickly began snatching up companies that offered streaming software.

The merger with Terran Interactive in June was the first streaming venture for Media 100. Terran is a maker of content compression, which helps present a clear picture of Internet content on the computer screen. The software was used in the "Star Wars Episode 1" Internet preview, Giles said.

Last week, Media 100 acquired privately held Wired Inc. in a $10 million cash deal. Wired's technology allows digital video authors to output their work to a DVD format.

The deal with Digital Origin will offer users the ability to capture, edit and stream video on the Internet using systems of both companies, executives said in a statement today.

Under the agreement, Media 100 will issue 0.5347 shares of common stock for each share of Digital Origin's stock. The transaction is subject to the approval of stockholders in both companies, but the deal is expected to be completed in about four months.

The two companies said they have also entered into a non-exclusive, four-year licensing agreement in which Media 100 will use Digital Origin's video editing and effects software in exchange for royalty payments.

Digital Origin, based in Mountain View, Calif., has developed applications, such as EditDV and IntroDV, which allow Web designers, DVD authors and others the ability to create video programs. The software developed by the company is designed to support digital video camcorders.

"The merger positions the new company as the premier supplier of streaming media production tools for the Internet," Digital Origin chief executive Mark Housley said in the statement.