Imagination Technologies’ CEO Andrew Heath conceded the loss of Apple as a major customer forced the graphics company to “change course”, after its board agreed a sale to private equity company Canyon Bridge Capital Partners.
In a statement UK-based Imagination, which put itself up for sale shortly after losing Apple as its main customer, said it reached an agreement for a sale to CBFI Investment Limited, a newly formed entity managed by Canyon Bridge.
The private equity company was reported to have been interested in striking a deal for Imagination for a while now, but questions were raised about whether it would actually get the go-ahead given its links to the Chinese government.
Beijing is a known backer of Canyon Bridge, and the company earlier this month saw a deal to acquire US-based Lattice Semiconductor blocked by President Donald Trump on national security grounds.
In an apparent bid to swerve any regulatory scrutiny the deal for Imagination Technologies, as expected, will not include the company’s US operations.
Imagination Technologies announced a separate deal to sell its US business MIPS to Tallwood Venture Capital for $65 million. The deal with Canyon Bridge is subject to completion of the MIPS sale.
However, the £550 million UK deal will also likely face scrutiny from regulators in the country, and Canyon Bridge already seems to have begun its charm offensive.
Imagination said CBFI “intends to invest in Imagination’s research and development capabilities in the UK”, adding it does not plan “to make any changes as regards to continuing employment of employees and management”.
Imagination Technologies filed a dispute resolution action against Apple after the US company said it was ending its deal to use Imagination graphics intellectual property in favour of developing its own, and the two companies failed to agree a royalties deal.
Commenting on the acquisition, Heath added the proposed deal with Canyon Bridge was a “very good outcome”.
“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”.
Apple’s latest iPhone, which was unveiled two weeks ago, includes a new graphics processing unit it said was developed in-house.
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