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Motorola to Acquire Modulus Video


Motorola, Inc. (NYSE: MOT) and Modulus Video, Inc., a privately-held company, announced the signing of a definitive merger agreement, under which Motorola will acquire Modulus Video. The terms of the transaction were not disclosed.

Modulus Video is a leader and innovator in MPEG-4 Advanced Video Coding (AVC) compression systems designed for delivery of high value video content in the IPTV, cable, broadcast and satellite marketplace. Modulus Video has partnered with Motorola for over two years bringing high-quality encoding solutions to key customers around the world.

This acquisition will complement Motorola’s recent acquisitions of Broadbus, Kreatel, Tut Systems and Netopia in the creation and delivery of an integrated, end-to-end video delivery system for multiple network architectures.

“Motorola is committed to offering an integrated, end-to-end video portfolio designed to meet the current and next-generation requirements of operators,” said Dan Moloney, President, Home and Networks Mobility business, Motorola, Inc. “As consumers demand more high definition video and interactive services, the need for advanced compression technology is increasingly important. As part of its advanced real-time video encoding products, Modulus Video has a powerful architecture and product development framework that is well suited for continued technological advancement.”

“Through this acquisition, Modulus Video will become part of a world-class organization in a highly strategic market segment. Our team will benefit from Motorola’s rich heritage and leadership of video delivery expertise,” said Bob Wilson, Chairman and CEO of Modulus Video. “Modulus Video will bring to Motorola a software-centric platform that ensures flexibility, reduced cost and fast development time.”

Upon completion of the transaction, Modulus Video will become a wholly owned subsidiary of Motorola and will be integrated into the Motorola Home and Networks Mobility business. Motorola intends to maintain Modulus Video operations in Sunnyvale, California.

The transaction is subject to customary closing conditions, including regulatory approvals and the approval of Modulus Video stockholders, and is expected to be completed in the second or third quarter of 2007.

About Modulus Video
Since its founding in 2002, Modulus Video has been the only company to focus 100 percent of its efforts on perfecting the use of the MPEG-4 AVC video compression standard. As a result, Modulus Video’s powerful MPEG-4 AVC encoders are now a critical component behind today’s most compelling IPTV deployments around the world, providing the most efficient use of available bandwidth and delivering outstanding standard definition and high definition television services over new and existing broadband infrastructure. Its products meet the needs of the broadcast, narrowcast and video-on-demand markets. For more information, please visit

About Motorola
Motorola is known around the world for innovation and leadership in wireless and broadband communications. Inspired by our vision of Seamless Mobility, the people of Motorola are committed to helping you get and stay connected simply and seamlessly to the people, information, and entertainment that you want and need. We do this by designing and delivering “must have” products, “must do” experiences and powerful networks -- along with a full complement of support services. A Fortune 100 company with global presence and impact, Motorola had sales of US $42.9 billion in 2006. For more information about our company, our people and our innovations, please visit

Forward-Looking Statements
Certain statements contained in this press release, including the expected timetable for completing the proposed transaction between Motorola and Modulus Video, future financial and operating results, benefits and synergies of the transaction, future opportunities for the combined company and products, any other statements regarding Motorola’s or Modulus Video’s future expectations, beliefs, goals or prospects, the near-term impact of the transaction on Motorola’s earnings per share, and any statements that are not statements of historical facts might be considered forward-looking statements. While these forward-looking statements represent managements’ current judgment of future events, they are subject to risks and uncertainties that could cause actual results to differ materially from those stated in the forward-looking statements. Important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, include: (i) the parties’ ability to consummate the transaction; (ii) the conditions to the completion of the transaction may not be satisfied, or the regulatory approvals required for the transaction may not be obtained on the terms expected or on the anticipated schedule; (iii) the parties’ ability to meet expectations regarding the timing, completion and accounting and tax treatments of the transaction; (iv) the possibility that the parties may be unable to achieve expected synergies and operating efficiencies within the expected time-frames or at all; (v) Motorola’s ability to successfully integrate Modulus Video’s operations and technology into those of Motorola and the possibility that such integration may be more difficult, time-consuming or costly than expected; (vi) revenues following the transaction may be lower than expected; (vii) operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) may be greater than expected following the transaction; (viii) the retention of certain key employees at Modulus Video; and (ix) the other factors described in Motorola’s Annual Report on Form 10-K for the year ended December 31, 2006 and its subsequent reports filed with the SEC. Motorola and Modulus Video assume no obligation to update or revise any forward-looking statement in this press release, and such forward-looking statements speak only as of the date hereof.


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