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Home > News > Company News > Imagination in talks with pote.....

Imagination in talks with potential buyers

  • Author:Ella Cai
  • Release on:2017-06-30
The Hertfordshire-based company announced last week that it had started a formal sale process for the whole group, less than three months after Apple – which represented about 70% of its revenues – announced that it would stop using Imagination’s GPU IP in new products within two years.

The company said: “Over the last few weeks [we have] received interest from a number of parties for a potential acquisition of the whole group. The board… has therefore decided to initiate a formal sale process for the group and is engaged in preliminary discussions with potential bidders.” 

Imagination had previously put its MIPS and Ensigma divisions up for sale, and last month completed the sale of its SoC business IMGworks to IC design house Sondrel. But last week’s announcement puts the whole of the rest of its business on the block. 

Imagination said that the sales processes for MIPS and Ensigma were “progressing well” and said that “indicative proposals” had been received for both businesses. 

Early speculation from analysts about the identity of potential buyers has linked a number of big semiconductor names to the talks, including Intel, Qualcomm and MediaTek. One theory is that a Chinese buyer could come into the frame. An industry source told Electronics Weekly: “They have the money and they want the IP – it wouldn’t be a surprise.” 

Some analysts believe that Apple itself could be interested in buying Imagination, although last week’s announcement reiterated that the two remain locked in a legal dispute over Imagination’s belief that Apple will not be able to develop its own GPU technology without infringing Imagination’s IP. 

Apple, meanwhile, is recruiting heavily for a team of engineers to develop GPU technology in London. 

Shares in Imagination rose on the news of the sale and were trading at around 160p as Electronics Weekly’s print edition went to press, valuing the company at just over £460m. However, that valuation was still around 40% below its valuation prior to Apple’s announcement that it was pulling out. 

Imagination was founded in 1985 and became one of the great success stories of the UK tech industry. Under the leadership of Sir Hossein Yossaie, who joined the business in 1992, it grew to a business with a valuation of almost £2bn in 2012. However, it became loss-making in recent years and faced criticism for its over-reliance on Apple as well as being slow to respond to markets such as the internet of things.