British chip designer outbids CEVA, but pays $40 million more than initially planned
British mobile graphics and microprocessor chip designer Imagination Technologies has won the bidding war against Israeli rival CEVA, offering to pay $100 million for the business and 82 patents of once-legendary MIPS Technologies.
In November, Imagination attempted to buy MIPS for $60 million, but was outbid by CEVA, which offered $75 million. In early December, Imagination increased its proposition to $80 million, but was once again matched by CEVA last week, when it offered $90 million.
TechWeekEurope previously reported that a consortium led by ARM will be buying 498 patents developed by MIPS for $350 million.
Going once, going twice
Established nearly 30 years ago, MIPS was a pioneer of Reduced Instruction Set Computing (RISC). By 1990s, it started to licence its embedded processor core designs, operating a business model similar to the one now used by ARM.
Today, chips designed by MIPS can be found in Blu-Ray players, digital TVs, game consoles, Wi-Fi routers, tablets and smartphones. In the last financial year, the company saw its technology deployed in 700 million devices.
MIPS’ new owner Imagination is best known for its Pure Digital Audio Broadcasting (DAB) receivers and PowerVR GPUs, which are licensed to Intel, Apple and Samsung, among others. Intel and Apple are also some of the company’s largest shareholders.
Meanwhile, CEVA’s intellectual property was shipped in over 1 billion devices last year, and powers handsets from Nokia, Samsung, HTC, LG, Motorola, Sony, Huawei and ZTE. The company has officially stated that it will not submit another buying proposal, leaving Imagination as the sole contender for the MIPS estate.
“While CEVA’s Board of Directors and management believed there was strategic merit in the combination of CEVA with MIPS, further increasing the purchase price would not meet our financial objectives,” commented Gideon Wertheizer, CEO of CEVA.
“We believe it is in the best interests of our shareholders that our available cash be reserved for other potential opportunities in the future,” he added.
The new price will serve as an amendment to the deal outlined in November, with all other material terms and conditions of the acquisition remaining as stated in the original announcement. As part of the deal, Imagination will get license rights to all of the MIPS patents, even those acquired by ARM.
The transaction is expected to close in the first quarter of 2013.
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