Audio-technology company DTS Inc. on Wednesday said it would acquire HD radio technology firm iBiquity Digital Corp. for $172 million, a move to capitalize on broadcast radio's digital upgrade.

Privately held iBiquity, which counts radio broadcasters iHeartMedia and CBS Radio among its investors, was formed when USA Digital Radio merged with Lucent Digital Radio in 2000.

IBiquity is the developer and licenser of HD Radio technology, the Federal Communications Commission-approved method for upgrading AM/FM broadcasting from analog to digital.

"Consumers have come to expect a higher-quality sound experience in their car," DTS Chief Executive Jon Kirchner said, and there is "opportunity for DTS to capitalize on the upgrade to HD Radio technology as cars are increasingly equipped with screens and advanced entertainment systems."

In 2014, iBiquity's technology was built into about a third of cars sold in the U.S., according to DTS.

The companies expect to complete the transaction later this year. The addition of iBiquity will add to earnings beginning in 2016, DTS said.

The combination is also expected to provide opportunities for additional geographic, service and technology expansion, DTS said.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

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(END) Dow Jones Newswires

September 02, 2015 08:15 ET (12:15 GMT)

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