Newport’s Johnson-Grace Bought by America Online

Johnson-Grace Co., which developed a technology that helps speed up transmission of digital computer data, has been acquired by its biggest customer, America Online Inc., the companies said Thursday.

America Online, a Vienna, Va.-based computer online service, paid 1.6 million shares of its common stock, valued at about $70 million, to Johnson-Grace shareholders.

Johnson-Grace was founded in 1992 by Chris Grace and Steve Johnson, who had met at the Harvard School of Government in the 1980s, said Geoff LeBlond, vice president of licensing at the company. The two were not available for comment, LeBlond said, because they were “out celebrating” the acquisition.

The company developed a data compression technology that speeds up the transmission of sound, pictures and other bandwidth-hogging information across telephone lines. America Online was among the first to make use of the technology, which could also improve computer users’ access to information on the Internet, LeBlond said.

The company and its 70 employees--including Johnson and Grace--will remain in Newport Beach, LeBlond said.