Orange County Business Journal

SRS Labs, Vizio Extend Licensing Deal

Chris Casacchia Wednesday, August 10, 2011

Santa Ana’s SRS Labs Inc., which makes chips and software that boosts sound in audio devices, has signed a multi-year licensing deal with Irvine’s Vizio Inc., the biggest flat screen TV seller in North America.

SRS will provide Vizio with its suite of audio enhancement technologies for numerous products, including TVs, soundbars, headphones and its newly launched tablet, according to the company.

Financial terms of the deal were undisclosed.

Investors looked past the announcement, sending SRS shares down about 4% in midday New York trading as greater economic uncertainties, fueled by European bank concerns and a tempered outlook from the Federal Reserve, spooked Wall Street and erased most of Tuesday’s gains.

SRS has a market value of about $116 million.

The deal with Vizio extends a longstanding partnership between the companies.

SRS stands to benefit from Vizio’s growth, particularly with consumer electronics accessories.

Vizio started sales of soundbars last year and now has roughly half the U.S. market, according to data from the Arlington, Va.-based Consumer Electronics Association.

Its Blu-ray DVD business, while still small, is up roughly 400% since 2009.

Other offerings include subwoofers, headphones, cables and wireless routers.

While Vizio has seen success in new-product rollouts as it diversifies into digital, mobile and online entertainment, TVs remain the company’s revenue driver.

It sold 6.9 million TVs in 2010 for a total North America market share of 18%, according to data from DisplaySearch, a unit of Port Washington, N.Y.-based NPD Group Inc.