Nvidia acquiring PortalPlayer for $357 Million

Nvidia has agreed to purchase PortalPlayer -- the company best known for the chips it manufactured for Apple's iPod. The deal will cost Nvidia US$357 million in cash. Nvidia will pay $13.50 for each outstanding share of PortalPlayer stock, which represents a 19 percent premium to the company's 20 day average closing price through November 3. The Board of Directors for both companies approved the purchase, but it is still subject to regulatory approvals.

Earlier this year, Apple started moving away from PortalPlayer's system-on-a-chip processors for the iPod product line. Apple's decision dealt a serious blow to PortalPlayer's bottom line since an estimated 70 percent of the company's revenue came from iPod chip sales.