Audio technology company DTS Inc. acquired iBiquity Digital Corp., a developer of high-definition radio technology, in a deal valued at $172 million.

DTS, in Calabasas, will finance the transaction announced on Wednesday with a combination of cash and debt.

Privately held iBiquity, in Columbia, Md., develops technology that upgrades AM/FM broadcasting from analog to digital to provide improved audio quality, expanded content choices and digital data services. The technology is used in consumer electronics and automobiles.

DTS Chief Executive Jon Kirchner said the acquisition strengthens his company’s position in the automotive market.

“Consumers have come to expect a higher quality sound experience in their car, and we believe there is a tremendous opportunity for DTS to capitalize on the upgrade to HD Radio technology as cars are increasingly equipped with screens and advanced entertainment systems,” Kirchner said in a prepared statement.

The deal is expected to close later in the year. iBiquity Chief Executive Bob Struble will continue to lead the HD Radio business for DTS.

Shares closed up $2.77, or nearly 11 percent, to $28.41 on the Nasdaq.