FREMONT, Calif., Feb. 12 /PRNewswire-AsiaNet/ -- ESS Technology, Inc. (Nasdaq: ESST), a leading supplier of mixed signal PC audio solutions, announced today it has signed an agreement to acquire OSEE Technologies, Inc., for approximately 300,000 shares of ESS Common Stock and approximately $3.6 million in cash. OSEE, a privately held corporation, is a developer of fax/modem technology. A substantial majority of the purchase price is attributable to research and development in-process and will be expensed in the quarter in which the transaction is completed. The transaction is expected to close by March 31, 1996. "Fax/modem technology is becoming an integral computer telephony feature on a multimedia PC, as a result of the increased popularity of the Internet and features including Internet phone, speakerphone and voice messaging systems. This acquisition strengthens our strategy of expanding our semiconductor product families we offer in providing complete multimedia solutions to PC manufacturers," said Mr. Fred Chan, Chairman and CEO of ESS Technology. Mr. Chan added, "With OSEE's advanced fax/modem V.34 and V.34bis algorithm technology, ESS will be able to provide modem and computer telephony applications on our multimedia processor, and this technology will also be ported to Intel's Pentium processor. Our goal is to enable PC manufacturers to provide audio and telephony functions as standard features." "OSEE's fax/modem telephony technology complements our recent acquisition of VideoCore Technology, Inc., which provides us with a high performance programmable multimedia processor for video, audio, graphics and communication. Our audio technology and the technology infusions from VideoCore and OSEE provide us complementary technologies in our overall strategy of providing complete multimedia solutions to our customers," concluded Mr. Chan. Except for historical information contained herein, the matters discussed in this press release are forward-looking statements that are subject to certain risks and uncertainties that could cause the actual results to differ materially from those projected, including the Yamaha patent litigation, the impact of competitors' new products, pricing, general economic conditions and conditions specific to the semiconductor industry, fluctuations in customer demand, the timing and market acceptance of new product introductions, the timely development of new products and other risk factors listed in the Company's SEC reports including the Registration Statement filed by ESS in connection with its initial public offering. ESS assumes no obligation to update the information included in this press release. ESS Technology, Inc., headquartered in Fremont, California, pioneered and is the leading supplier of mixed signal PC audio solutions that integrate all essential audio components on a single chip. ESS is committed to expanding its multimedia semiconductor product families by leveraging its expertise in digital, analog, and mixed signal technologies and software, along with its customer base and manufacturing partnerships. CONTACT: Ralph J. Harms, VP Finance, CFO, ext. 102, or Marge Duncan, Investor Relations Manager, both of ESS Technology, Inc., 510-226-1088/