Motorola and Modulus Video announce 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 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.

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.