Imagination Technologies Formally Puts Itself Up For Saleby Ryan Smith on June 22, 2017 7:45 AM EST
The fate of Imagination Technologies has become something of a saga in recent months. The prolific IP vendor, Apple’s right-hand supplier for GPU designs and IP over the last decade, found itself on the rocks in April, when Apple announced they would be transitioning away from using Imagination’s IP and designs. Then in May, the company announced that they would be doubling-down on the GPU business – their strongest business – by selling off their remaining Ensigma communications and MIPS CPU businesses. Now this morning, the company has announced that they have decided to instead focus on going another route, and will be putting the entire company up for sale.
While the company as a whole was not formally up for sale until today, as you’d expect for a company in difficult circumstances like Imagination, that option has unofficially been on the table since the start. To that end, Imagination has reported that a number of parties have expressed an interest in buying the entire company. As noted in Imagination’s press release:
Imagination Technologies Group plc (LSE: IMG, “Imagination”, “the Group”) announces that over the last few weeks it has received interest from a number of parties for a potential acquisition of the whole Group. The Board of Imagination has therefore decided to initiate a formal sale process for the Group and is engaged in preliminary discussions with potential bidders.
At this time Imagination is not naming any suitors – and indeed is warning that a sale may not go through at all – though at this stage it’s difficult to imagine someone not taking advantage of the situation. Imagination’s PowerVR GPU IP alone is valuable to virtually all of the major SoC vendors, not to mention IP powerhouses and former customers such as Qualcomm, Intel, Samsung, and of course, Apple.
Meanwhile the MIPS and Ensigma business have yet to be sold, and a buyer could opt to pick those businesses up too. Otherwise, for the time being, Imagination is continuing their efforts to sell of those businesses, and they have already received proposals for both.
As for a potential price for the company, assuming Imagination were purchased wholesale, after today’s announcement the company’s market cap has jumped to £400M (~$500M USD). At about half of the company’s 52-week high, this would be significantly cheaper than had anyone attempted to purchase the company before the Apple split. The final price tag then would be somewhat higher, as a sale would almost certainly come with a premium over the company’s current stock price.
Finally, while the company looks for potential buyers, they are also continuing their dispute with Apple. At last report, the companies were still going through their contractual dispute resolution process. It’s not clear whether this process would be completed before Imagination finds a buyer.
Source: Imagination Technologies
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name99 - Thursday, June 22, 2017 - linkThere is zero reason to believe that the A10X GPU is anything other than what you would expect, namely a core-increased version of the A10 GPU. That has been the Apple pattern since the A5X, and there are no strange performance anomalies or whatever that indicate anything different this time round.
Most significantly, the master "feature" PDF that describes what Metal features are available on every specific GPU that Apple supports does not distinguish between A10 and A10X; it only refers to iOS_GPUFamily3
lucam - Thursday, June 22, 2017 - linkIt's IMG PowerVr Apple customer version. It is stated inside the Metal and Open GL drivers.
Cygni - Thursday, June 22, 2017 - linkThese are huge companies, not pals working in a garage on a toy. Not sure why people try to anthropomorphize business all the time like its a soap opera.
Apple was paying hundreds of millions for their tech, and eventually decided they could do it in-house instead. That's business.
beginner99 - Thursday, June 22, 2017 - linkSomewhat true but basing your business on 1 or even just a handful clients is plain and simple stupid and will ruin you sooner or later. A business that relies on 1 customer has actually never been healthy.
iwod - Friday, June 23, 2017 - linkIMG's GPU licenses were expensive, and honestly their drivers support aren't industry leading either. And hence why most decide to go with the ARM Mali route, dispirit being an inferior solution in terms of hardware, their software / drivers are much better. And anyone who follow GPU knows Hardware isn't even half the story, it is the drivers that matters.
Since Apple write its own drivers anyway, it didn't really matter. So Apple decided to ask IMG to lower its IP price because Apple wasn't using much of its "Services" anyway. IMG refuse, and Apple asked IMG if they could sell their GPU business instead when the Company was valuing close to 1.3B. They also said no.
I mean if you are old enough to follow IMG's days since the Voodoo era you should know what kind of company they are.
tipoo - Wednesday, June 28, 2017 - linkWhere would they have been without years of getting hundreds of millions off the iPhone?
They're in a better market position than they would have been without them. A partner can dump you at any time. That they had most of their eggs in one basket is unfortunate.
arnd - Thursday, June 22, 2017 - linkOne of their current customers (Tsinghua Unigroup) bought 3.1% of ImgTec On May 23, but has now started selling again on Jun 19:
Other big customers for the GPU are of course TI and Renesas, which I would guess are also watching carefully.
SquarePeg - Thursday, June 22, 2017 - linkIt seems that Imagination would be a good fit for Samsung or Google. I'm sure they would like the patent firepower to use against Apple should their upcoming GPU architecture steal Imagination IP. It would also give each company a further way to differentiate themselves on upcoming SOC designs.
BrokenCrayons - Thursday, June 22, 2017 - linkI have to admit, I didn't see that one coming at all. It makes sense though to just flee the ship if it looks like it'll sink and, as SquarePeg rightfully points out, owning Imagination's IP portfolio would give another company a pretty large litigation stick to shake at Apple if Apple is indeed using technologies similar to Imagination's in their new products. A buyer would have to weigh the cost of purchase against the value gained from litigation (risky business to say the least) and any potential profits reaped from selling newer/better products using Imagination's assets.
Samus - Thursday, June 22, 2017 - linkApple has some of the best IP lawyers in the world. They wouldn't break ties with Imagination if it would bite them in the future; licensing will likely carry over without legal retribution with Imaginations new owner.
And that has significant weight in their valuation. It effectively makes their patent portfolio useless against Apple.