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Motorola Buys Tut

The tech giant isn't paying a king's ransom in the transaction.

Motorola (MOT) is paying $39 million for Tut Systems (TUTS) in an effort to boost its video technology offerings.

The Schaumburg, Ill. tech titan says it will pay $1.15 a share for the Lake Oswego, Ore. video systems supplier. That represents an 18% premium over the company's Wednesday closing price of 97 cents.

The takeover price is well below the $100 a share level that Tut traded at in early 2001.

Motorola is one of the leading cable set-top box suppliers along with


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Scientific-Atlanta unit. Motorola is also supplying phone companies with Internet Protocol TV gear as the telcos roll out video services.

"Together, our combined portfolio will provide service providers with next-generation solutions for delivering rich video experiences into the connected home -- and out into the world," Motorola TV chief Dan Moloney said in a press release.

Motorola says the acquisition will have no effect on earnings.

Motorola shares fell a penny to $20.40 in pre-market trading Thursday.