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Sunday, September 24, 2017

Imagination broken up and sold to two venture capital firms

By Nick Flaherty

UK chip design supplier Imagination Technologies has been broken up and bought by two US venture capital firms.

Imagination includes the MIPS processor cores, PowerVR graphics cores and ENSIGMA wireless cores. The company had been in trouble since losing a deal with Apple for graphics technology. That dispute is still on-going.

The MIPS division, including all the patents, has been bought by Tallwood MIPS Inc, a company indirectly owned by Tallwood VC of Palo Alto, for $65m in cash. The deal is expected to close next month.
This removes one of the main blocks to Canyon Bridge Capital Partners buying the rest. The venture capital that last week was blocked by US president Trump from buying Lattice Semiconductor over concerns about its backing by Chinese funds.

“This transaction, which is separate to the offer for Imagination by Canyon Bridge, will ensure MIPS remains an independent licensing business," said Andrew Heath, Chief Executive of Imagination. “MIPS has gained notable momentum over the last year or so having secured a number of design wins, and made good progress towards profitability. This significant progress, allied to Tallwood’s investments in the semiconductor industry, will provide increased customer choice and new job opportunities based on the continued growth of the MIPS business.”

Tallwood has investments in startups what were bought by Qualcomm (such as SiRF), Silicon Labs and Broadcom as well as direct investments in Cavendish Kinetics and Accent.

The Canyon bridge deal values the bulk of Imagination at $550m, almost ten times that of MIPS. Imagination acquired MIPS in 2013 for $60m, although the majority of the patents at that time were sold to ARM.

"Imagination has made excellent progress both operationally and financially over the last 18 months until Apple’s unsubstantiated assertions and the subsequent dispute forced us to change course," said Heath. "The acquisition will ensure that Imagination – with its strong growth prospects – remains an independent IP licensing business, based in the UK, but operating around the world. Imagination employs a large number of hugely talented individuals who have developed our market leading technology. They and the business as a whole will benefit from Canyon Bridge’s investment in Imagination as it moves to the next stage of its development.”

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