The future of Imagination Technologies has become uncertain after Apple's declaration on April 3. The iPhone maker had informed their long-time GPU partner that they will be winding down their use of Imagination's Intellectual Property and designs. After considering a few different options, the U.K. based chipmaker put itself up for sale after seeing a decline in its stock value.
Imagination's decision to sell itself is not surprising to anyone following the company's success, given Apple was the main customer of Imagination Technologies for a decade. Shortly after Apple's announcement, Imagination's share prices collapsed by nearly 70 percent (!) and since then, they have struggled to recover. The difficult circumstances left the chipmaker no choice but to put itself up for sale and hope to find a buyer soon
In a press release, the British chipmaker said:
"Imagination Technologies Group plc 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."
The company, established in 1985, is looking at potential buyers such as Intel, Qualcomm, MediaTek, Samsung, Google and of course Apple as Imagination's PowerVR GPU IP would be very valuable to all major SoC vendors. The company has not specifically named any suitors, but the aforementioned companies are in positions where they can take good advantage of this purchase.
Imagination Technology is divided into three major divisions: MIPS, which produces low-power CPUs for mobile devices, wearables and IoT devices; Ensigma, which offers technologies for wireless IP connectivity; and PowerVR, its graphics processor (GPU) division. Potential buyers could either purchase the whole group or individual divisions, depending on their needs and the resulting negotiation agreements.
The estimated value of the company is about $528 million, jumping as much as 21 percent on Thursday when the selling announcement was made. The final price tag for a buyer would be higher, as a sale would almost certainly come with a premium over the company's current stock price.
While the company looks for buyers, they are also continuing their dispute with Apple. As last reported, the companies were still going through their contractual dispute resolution process. It's not certain whether this process would be completed before Imagination finds a suitor.
Source 1: Anandtech Source 2: Reuters
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