DTS Inc. said Wednesday it acquired Neural Audio, a Washington audio technology business that licenses branded products for the creation, distribution and playback of music, movies, broadcast programs and video games.

Under the terms of the deal, which closed Dec. 31, Agoura Hills-based DTS paid $7.5 million in cash for Neural Audio's assets, and it may pay up to $7.5 million more over the next five years if benchmarks are met.

Neural Audio, based in Kirkland, Wash., will expand DTS' branded technology offerings focused on the broadcast, satellite radio, automotive and gaming markets. Key management, including Chief Executive Geir Skaaden and Chief Scientist James Johnston, a pioneer in perceptual audio coding used in the AAC and MP3 formats, plan to stay with the company.

In an additional announcement, DTS, which develops enhanced digital sound technologies, said it plans to open a research and development facility in Silicon Valley.

DTS shares were down 41 cents, or 2 percent, to $17.59, in morning trading on the Nasdaq.

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