The British tech industry giant, Imagination Technologies Group, has agreed to a sale to the Chinese-funded private equity firm Canyon Bridge. The deal has valued the company at about £550 million pounds, or $742.5 million dollars.
The agreed upon deal comes after Imagination Technologies lost its biggest client and shareholder, Apple Inc., in April earlier this year. Apple announced it would no longer be requiring the services of Imagination Technologies as they would begin to phase out the use of Imagination Technologies’ graphics processors in the multitude of Apple products that use them, including the ever-increasingly popular iPhone. Graphic processing units, or GPUs for short, are what allow videogames, artificial intelligence and virtual reality technology to function in smartphones.
The Hertfordshire-based chipmaking company’s stock plummeted over 70 percent of its value after the announcement of the breakup from Apple. Imagination Technologies has been slowly rebuilding its value in the months since, with the biggest increase in value being back in June when the company announced it was putting itself up for sale.
Founded in 1985 as VideoLogic, the little company specialized in graphics, sound acceleration, home audio and video capture systems. In 1999, they changed the name to Imagination Technologies Group and carved out a place for themselves in Britain’s intellectual property licensing industry. In November of 2008, Imagination Technologies’ licensing agreement with Apple was revealed. The company was responsible for developing a then-new high performance version of its PowerVR SGX graphics processor chip. This relationship ended up being highly valuable to both parties until they ended working relations earlier this year.
Both of the company’s have made statements regarding the purchase, with both press statements detailing that Canyon Bridge currently has no intentions of cutting any jobs after the proposed merger. Canyon Bridge has also pledged to continue investing in Imagination’s UK research and development capabilities.
The buyer, Canyon Bridge, is headquartered in Palo Alto, California and is backed by Yitai Capital, a state-owned Chinese fund. The acquisition does not include Imagination’s US division, MIPS, which is being bought for $65 million dollars by Tallwood Venture Capital, a Silicon Valley investment group. Imagination’s sale to Canyon Bridge is contingent upon the sale of MIPS to Tallwood.
Imagination Technologies’ board of directors have given their support for their deal and it should be finalized within the coming weeks.