Mergers & Acquisitions

Mergers & Acquisitions

November 07, 2012

MIPS Signs Agreements with Bridge Crossing and Imagination

MIPS Technologies, Inc. will be selling its patent properties to Bridge Crossing LLC. MIPS will also be acquired by Imagination Technologies (News - Alert). As a result of the two contracts, a normal shareholder of MIPS will be entitled to nearly $7.31 per share as cash back. As compared to the closing price of MIPS on April 11, 2012, the entire worth of the transaction has risen by nearly 40 percent.

MIPS currently has 580 patent resources, accounting for a gross value of $350 million. While Bridge Crossing will obtain 498 patent properties, MIPS will hold on to the remaining 82 patent assets. All the patent properties acquired by Bridge Crossing can be permanently accessed by MIPS with no royalty charges. The working business of MIPS, the 82 abovementioned patent properties and license rights to all of the outstanding patent properties of MIPS will be taken over by Imagination for $60 million.

In a statement, Sandeep Vij, CEO, MIPS said, "After a thorough review of a wide range of alternatives to enhance shareholder value, our Board of Directors concluded that the best alternative for the company would be the sale of patent properties to a consortium formed by AST, and a sale of the company to Imagination. Importantly, as part of Imagination, the MIPS architecture will continue to be supported, and protected by MIPS patents. This highly successful outcome builds upon the rich heritage of the MIPS processor architecture, while effectively monetizing the company's valuable patent portfolio."

According to Vij, the organization aims to develop a potent, well-separated and extremely significant substitute to current CPUs in the market by merging the technologies and skills of MIPS and Imagination. MIPS' customers, employees and partners stand to benefit with this strategic decision.

Hossein Yassaie, CEO, Imagination said, "The MIPS architecture is widely respected, and is complementary to Imagination's existing CPU capabilities. I believe that this proposed transaction will be welcomed by both companies' customers, including our mutual partners, and by the electronics industry at large. Post deal closure, Imagination will continue to support and expand the MIPS architecture and ecosystem, with the combined effort aiming to create a new industry-leading force in CPU development and licensing."

Edited by Rachel Ramsey

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