Nvidia Corp is all set to acquire California-based PortalPlayer, Apple Computer's supplier of MP3 decoder, as also the controller chip that goes into its wildly popular iPod.

Founded in 1999, the company is known for its high performance system-on-chip (SoC) technology that powers some world-renowned MP3 digital music players.

Under the definitive agreement, Nvidia will pay $13.50 in cash for each outstanding share of PortalPlayer common stock, which represents a total purchase price of approx $357 million, or approx $161 million net of cash on PortalPlayer s balance sheet as of September 30, 2006.

Speaking about the take-over, Jen-Hsun Huang, president and CEO, Nvidia, said, "With this acquisition, we are combining the two essential technologies of next-generation PMPs, PDAs, portable game players, and phones: PortalPlayer's innovative Application Processor technology and NVIDIA's industry-leading GPU technology. With the products created through this combination, we intend to drive the next digital revolution, where the mobile device will become our most personal computer."

Adding to it, Richard Sanquini, chairman - Board of Directors, PortalPlayer, said, "We feel the advantages offered by the Nvidia acquisition are most compelling, and that our customers and employees will benefit from it's strong position in handheld GPU technologies, and its vast resources and global reach."

Nvidia believes this acquisition will accelerate their ongoing investment in handheld product strategy. Nvidia's handheld technology, combining high-quality graphics, TV, and video with low power and a small footprint, is used in many industry-leading portable media devices, including phones from Motorola, Samsung, Kyocera, HTC, and Sony Ericsson.