Imagination Technologies sells to China-backed equity firm for 550M pounds

Posted:
in General Discussion edited September 2017
Canyon Bridge, an equity firm backed by Chinese fund Yitai Capital, on Friday announced an agreement to acquire British chipmaker, and soon-to-be-former Apple partner, Imagination Technologies.




According to a report from the Financial Times, the Canyon Bridge deal is valued at about 550 million pounds ($742 million) and is contingent on the completion of a separate sale involving MIPS, Imagination's U.S. unit.

Imagination decided to sell off MIPS and intellectual property licensing business Ensigma in May as it struggled to stay afloat after Apple announced plans to stop using the company's intellectual property within two years.

As Imagination's largest customer and one of its biggest shareholders, Apple's decision to ditch the firm's GPU technology for its own in-house designs came as a shock to shareholders. Without the promise of Apple royalty payments, which came in at $75.8 million for the 2015-2016 financial year and rose to approximately $81 million for fiscal 2017, Imagination's future was uncertain.

Flailing to stay alive, the British company entered a "dispute resolution process" with Apple, accusing the iPhone maker of "unauthorized use of Imagination's confidential information and Imagination's intellectual property rights." In a bit of back-and-forth, Apple later claimed it stopped accepting new IP from Imagination in 2015, adding that the firm only decided to apprise its shareholders of the situation after Apple invoked a contract clause to pay lower royalty rates.

The chipmaker ultimately sought to sell itself in June.

"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 Imagination Technologies CEO Andrew 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."

Prior to iPhone 8's A11 Bionic chip, Apple used Imagination's PowerVR technology in its handsets. PowerVR is still present in current iPads, Apple Watch Series 3 and Apple TV 4K. The release of A11 Bionic suggests all mobile products coming out of Cupertino will integrate in-house GPU designs free of Imagination IP within the estimated two year window.
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Comments

  • Reply 1 of 34
    slurpyslurpy Posts: 5,107member
    Wow, that was fast. Incredible that the company needs to sell themselves off after losing one client. Remember all the shit-talking they did about Apple being clueless about GPUs? Yeah. Kind of sad, I do think they made a great product. But they should have known and expected that Apple would eventually go in-house. 
    edited September 2017 RacerhomieXAvieshekClarityToSeeStrangeDayslkrupppscooter63jbdragonwatto_cobra
  • Reply 2 of 34
    wizard69wizard69 Posts: 12,695member
    Apple should buy MIPS just for its IP.   
    robin huber
  • Reply 3 of 34
    RacerhomieXRacerhomieX Posts: 95unconfirmed, member
    Good bye.
  • Reply 4 of 34
    This is what happens when you become an Apply supplier and give all you've got to them.  Samsung didn't just became an Apple supplier they became a competitor in order to be around in case Apple doesn't need them anymore.
  • Reply 5 of 34
    2018 is when Apple products become truly awesome. 
    RacerhomieXcornchip
  • Reply 6 of 34
    Imagination Tech stopped being a tech company and became a financial company licensing IP. If you don’t innovate like hell for Apple you’re dead to them and in this case actually dead. 

    Notice the end of article? All iPads, newest series 3 Watch and even the Apple TV 4K are legacy. Two years from now the new versions will be built using Apple IP and not Imagination Tech IP. 

    The Apple roadmap now has some certainty. 
    RacerhomieXwatto_cobraanton zuykov
  • Reply 7 of 34
    wizard69 said:
    Apple should buy MIPS just for its IP.   
    They definitely would have, if it’d been worth it...
    sandorRacerhomieX1983jbdragonwatto_cobra
  • Reply 8 of 34
    vision33r said:
    This is what happens when you become an Apply supplier and give all you've got to them.  Samsung didn't just became an Apple supplier they became a competitor in order to be around in case Apple doesn't need them anymore.
    The company was on a gravy train for years because of Apple, they wouldn't even have got that money. They should have used that money to get their head out of their asses but didn't so there we are.
    ClarityToSeeRacerhomieXcornchippscooter63jbdragonwatto_cobraanton zuykov
  • Reply 9 of 34
    vision33r said:
    This is what happens when you become an Apply supplier and give all you've got to them.  Samsung didn't just became an Apple supplier they became a competitor in order to be around in case Apple doesn't need them anymore.
    Yeah, right... /s
    cornchipjbdragon
  • Reply 10 of 34
    smalmsmalm Posts: 654member

    "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 Imagination Technologies CEO Andrew Heath. 
    Apple Fires Back at Supplier Imagination
    watto_cobra
  • Reply 11 of 34
    ClarityToSeeClarityToSee Posts: 34unconfirmed, member
    Apple did not enter into contract in perpetuity to be a nanny with no end in sight. They are free to change course if it suits them and their customers, just like I would change a personal decision if it suits me better. The problem is with the short sighted short term profits only mentality in capitalism that prevents companies from making substantive longer term investments. If it ain’t for the US government and US Military investing hundreds of billions of dollars in R&D each year, Wall Street as we know it would have been long gone.  
  • Reply 12 of 34
    vision33r said:
    This is what happens when you become an Apply supplier and give all you've got to them.  Samsung didn't just became an Apple supplier they became a competitor in order to be around in case Apple doesn't need them anymore.
    Yeah, Intel is screwed. 
  • Reply 13 of 34
    As Imagination's largest customer and one of its biggest shareholders, Apple's decision to ditch the firm's GPU technology for its own in-house designs came as a shock to shareholders.”

    You've been warned Intel..... A series is coming for you next. 😏
    RacerhomieXcornchip2old4funwatto_cobra
  • Reply 14 of 34
    This was a failure of management at Imagination. 

    It was not a mistake to be a supplier to Apple. It was profitable for Imagination while it lasted. 

    The mistake was to apparently have no plan B if they lost Apple as a customer. 

    I work for a company where 90% of our business comes from one customer (sort of). I strongly suspect our management has absolutely no plan whatsoever for what to do if we lose that customer. I suspect we’ll be dead as a door nail. But it doesn’t have to be that way. 
    StrangeDayscornchippscooter63icoco32old4funwatto_cobra
  • Reply 15 of 34
    fracfrac Posts: 480member
    "...Apple's unsubstantiated assertions and the subsequent dispute..."
    Well Apple just proved their assertion that they would and could build their own in-house graphics solution. Now it's up to Imagination to prove it's assertion that it still uses their IP.  And they could still fail the Canyon Bridge 'contingency' MIPS sale condition. I cant imagine Canyon Bridge wanting to start their ownership with an expensive court battle over IP.
    tmay
  • Reply 16 of 34
    wizard69 said:
    Apple should buy MIPS just for its IP.   
    They definitely would have, if it’d been worth it...
    Didn't rumors state Apple made a bid to buy this company and they said no...
    watto_cobra
  • Reply 17 of 34
    vision33r said:
    This is what happens when you become an Apply supplier and give all you've got to them.  Samsung didn't just became an Apple supplier they became a competitor in order to be around in case Apple doesn't need them anymore.
     Really? You act as if Apples business made Samsung what it is. Samsung has been in business since 1938. They do just a little bit more than fabrication and memory  for Apple 
    jbdragon
  • Reply 18 of 34
    Ah, the West. We will sell anything for a few bucks. Who cares if it's the family jewels...
    cornchipwatto_cobra
  • Reply 19 of 34
    This is what typically happens when a business allows itself to become too dependent on sales to just one company.
    jbdragonwatto_cobra
  • Reply 20 of 34
    Rayz2016Rayz2016 Posts: 4,556member
    blastdoor said:
    This was a failure of management at Imagination. 

    It was not a mistake to be a supplier to Apple. It was profitable for Imagination while it lasted. 

    The mistake was to apparently have no plan B if they lost Apple as a customer. 

    I work for a company where 90% of our business comes from one customer (sort of). I strongly suspect our management has absolutely no plan whatsoever for what to do if we lose that customer. I suspect we’ll be dead as a door nail. But it doesn’t have to be that way. 
    I worked for a company that was in the exact same position. It doesn’t exist anymore. You should think about changing jobs. 
    RacerhomieXcornchipicoco32old4funwatto_cobra
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