Imagination Acquires MIPS

MIPS Technologies sells portions of its business to Imagination Technologies for $60M

November 6, 2012

2 Min Read

SUNNYVALE, Calif. -- MIPS Technologies, Inc. (Nasdaq: MIPS), a leading provider of industry-standard processor architectures and cores for home entertainment, networking, mobile and embedded applications, today announced it has entered into separate definitive agreements with Bridge Crossing LLC ("Bridge Crossing"), an acquisition vehicle of Allied Security Trust ("AST"), and Imagination Technologies Group plc (LSE: IMG) ("Imagination") with net proceeds of approximately $7.31 per share in cash to each holder of MIPS common stock. The total value of the transaction represents a 40% premium to the closing price on April 11, 2012, the day prior to the first public rumor of a potential sale of MIPS.

Bridge Crossing will acquire 498 of MIPS' total 580 patent assets for gross proceeds of $350 million. MIPS will retain the remaining 82 patent properties that are directly relevant and key to the MIPS architecture, and will also be granted a royalty-free, perpetual license under all of the patent properties sold to Bridge Crossing. MIPS will also provide a restricted license to Bridge Crossing under the 82 retained patent properties. Subject to consummation of the Bridge Crossing transaction, Imagination will acquire the operating business of MIPS, the 82 aforementioned patent properties, and license rights to all of the remaining patent properties of MIPS for $60 million.

Both transactions are subject to customary closing conditions, including the approval of MIPS' shareholders, who will vote separately on each of the transactions. Approval of the Bridge Crossing transaction is not subject to shareholder approval of the Imagination acquisition. The proceeds of the transactions, which are subject to a holdback of approximately $100 million to cover tax and other liabilities, will be distributed to MIPS shareholders on a pro-rata basis through a recapitalization of MIPS common stock.

In a separate release:SUNNYVALE, Calif. -- Imagination Technologies Group, a leading multimedia, communications and embedded processor technology company, has signed an agreement to acquire the operating business and certain patent properties, as well as license rights to all of the remaining patent properties, of MIPS Technologies, Inc. ("MIPS"), a leading provider of CPU (central processing unit) processor architectures and cores, for a cash consideration of US$60 million.

In addition to the operating business of MIPS, Imagination’s purchase includes ownership of 82 key patent properties (the “Retained Patent Properties”) that are directly relevant to the MIPS® architecture, and comprehensive license rights to all of the remaining 498 MIPS’ patent properties (the “Divested Patent Properties”). In a separate transaction, the Divested Patent Properties are being sold to Bridge Crossing LLC, by MIPS for US$350 million.

Imagination Technologies Group plc

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