Canadian fiber-optic gear-maker Valdor Technology International has received approvals from the TSX-V stock exchange to acquire streaming video encoding specialist VideoWare for just over $1 million.

VideoWare, a wholly owned subsidiary of North Texas-based ViewCast (News - Alert).com, has been in business for eight years with revenue of about $1.8 million last year.

Valdor is making one payment of $500,000 followed by additional payment $600,000 secured by a promissory note, to be paid by March 21. A 7 percent royalty on gross sales from the VideoWare business will be paid to ViewCast over a five year period, up to $1.75 million. Valdor is funding the acquisition of the VideoWare business and assets through a combination of debenture and equity financing.

VideoWare markets the Niagara media appliances and encoders, including the GoStream product line. GoStream is a compact streaming system that is designed for lecture capture. Powered by Osprey technology, the system comes with Niagara SCX v7.3 that includes enhanced audio features for adaptive and non-adaptive encoders. Additional options such as an Osprey audio input card makes the GoStream a good solution for professional studios. Niagara and GoStream together have about four patents associated with them.

"We are acquiring an asset that is in a great business sector and that has industry leading product lines,” said Elston Johnston, chairman of the board and director at Valdor. “In addition to a business in its growth mode, we are acquiring a strong, experienced and motivated management team. We are confident we have both the team and product lines to aggressively grow this business. [The] new portable GoStream line is in high demand."

The match-up carries some synergies considering that the streaming video industry is converting to fiber optics rapidly. Valdor pointed out that the VideoWare customers (i.e., media companies and service providers) are a market for fiber-optic components, unrelated to their video streaming activities; and, the VideoWare management team has significant experience and contacts in the fiber optics industry.

Global Industry Analysts projects that the fiber optics market will reach $42 billion by the year 2017.