Intel Corp has paid $7m for a 10% stake in Austin, Texas-based VTEL Corp with warrants for another 9.9% to seal an agreement under which the two companies agree to cross-license some video-based technologies and undertake co-operative research and development in the video arena. The agreement formalises the memorandum of understanding announced in August (CI No 2,241). The pair intend to develop a compatible family of videoconferencing products – VTEL will incorporate Intel’s Indeo Video technology into its conferencing product line, and license its H.320 video-based conferencing technology to Intel for incorporation into future Intel products. Intel is paying about $10m all told, $7m for the shares and warrants to buy further shares at between $8.40 and $11.50, depending on the date of exercise over the next two years. The $3m or so balance of the funding is being put up to offset co-operative engineering expenses for the products to be developed under the agreement. Both VTEL and Intel will have access to the resulting products and technology.
