Dolby acquires Doremi Labs

San Francisco-based Dolby Laboratories Inc., the developer of music and motion picture sound systems, announced on Monday it has acquired Doremi Labs. 

The deal allows Dolby to advance the cinema experience for moviegoers with help from Burbank-based Doremi, a digital cinema technology company founded in 1985.

The deal is valued at $92.5 million in cash plus an additional $20 million in contingent consideration that may be earned over a four-year period.

Dolby, founded by Ray Dolby in 1965, developed a system that reduced background noise in tape recordings, enabling musicians to produce multitrack mixes without a hissing sound in the background.


In the 1970s, the company’s surround sound system became the standard in films, beginning with such movies as “Star Wars.”

In 2012, Dolby unveiled new sound technology called Dolby Atmos at the Dolby Theatre (formerly the Kodak Theatre) at the Hollywood & Highland Center. A year later, the Atmos sound systems were used for films such as “Star Trek Into Darkness.

Shares of Dolby on Monday morning were at $42.02, up 0.24%. 

The companies said in an FAQ on their website that their goal is to “simplify theatrical exhibition...while improving functionality and reducing overall cost.”


“We are thrilled to bring together two teams that are committed to delivering the best digital cinema processing and playback solutions,” said Kevin Yeaman, president of Dolby Laboratories, in a statement. 

For more news on the entertainment industry, follow me @saba_h

Get our daily Envelope newsletter