China-Backed Firm Reaches Deal to Buy Apple Supplier Imagination Technologies
September 23 2017 - 3:52AM
Dow Jones News
By Julie Steinberg
Canyon Bridge Capital Partners LLC, a China-backed investment
firm whose planned acquisition of a U.S. semiconductor company was
scuttled earlier this month, has reached a deal to buy a U.K.-based
chip designer for GBP550 million ($742.2 million).
Canyon Bridge said late Friday it will acquire Imagination
Technologies Group PLC, a small but important Apple Inc. supplier,
in an all-cash deal for 182 British pence a share, a 42% premium to
Imagination's Friday closing price.
To appease any concerns that the deal may raise among British
authorities, Canyon Bridge said it would maintain Imagination's
U.K. headquarters and indicated it had no plans to cut jobs or
change Imagination's management.
Imagination, which put itself up for sale in June, doesn't
manufacture chips itself. It had been supplying Apple with
graphic-processing units, which power videos and other animations
on smartphones and computers. Imagination in April said Apple would
stop using Imagination's technology in its devices, which sent
shares plummeting. Imagination said at the time that Apple was
working on its own designs for such technology.
Canyon Bridge's plan to buy Imagination comes after its deal to
acquire Portland, Ore.-based Lattice Semiconductor Corp. was
rejected by President Donald Trump. The companies had appealed to
Mr. Trump to overrule a negative recommendation by the Committee on
Foreign Investment in the U.S., a multiagency panel that screens
foreign takeovers for national-security concerns.
Canyon's potential deal with Imagination excludes the latter's
U.S. embedded-processor business, which Imagination said Friday it
is selling for $65 million to Tallwood Venture Capital, a Palo
Alto, Calif.-based firm. Leaving out the U.S. operations would help
avoid scrutiny from CFIUS this time around.
Tallwood invests mainly in semiconductor companies. It also has
a China connection: It has operations in Wuxi city, Jiangsu
province and in 2010 joined with a local government entity to
invest in China's semiconductor industry.
Divesting the U.S. operations is a precondition of the
Imagination acquisition, so if CFIUS blocks the
Tallwood-Imagination deal, that could imperil the
Canyon-Imagination tie-up.
Kate O'Keeffe and Ben Dummett contributed to this article.
Write to Julie Steinberg at julie.steinberg@wsj.com
(END) Dow Jones Newswires
September 23, 2017 04:37 ET (08:37 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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