Semiconductor maker Exar Corp. (NYSE:EXAR) announced Tuesday that it intends to acquire the assets of privately held hardware and software "compression solutions" provider Altior for $5 million upfront.

This initial consideration will be paid in the form of a mix of cash and stock. Subsequent to the acquisition, Exar will pay Altior's owners a further three-year "earn-out" -- the exact criteria for which were not disclosed in the press release -- tied to net revenue contributed by Altior.

Exar noted that in Q4 of 2013, at least, the cost and benefits of the acquisition will be "immaterial" to Exar's overall results.

Exar further noted that its interest in Altior is the company's presence in the market for "big data applications," to which Altior's data compression solutions are well-suited. As Exar explained, certain storage requirements can be reduced by as much as 50% through use of Altior's tech, significantly reducing cost of ownership without impacting data analytics performance.

Elaborating on its advantages, Altior CEO Ramana Jampala predicted that "when combined with the state-of-the-art Exar hardware compression acceleration," Altior's tech "will reduce the disk space ... power consumption and overall system cost significantly."

Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.