Technicolor to Unload Research & Innovation Unit

Has a 'binding offer' from InterDigital for unit that has operated labs linked to data analytics, artificial intelligence, machine learning, VR and augmented reality.

Jeff Baumgartner, Senior Editor

February 11, 2019

2 Min Read
Technicolor to Unload Research & Innovation Unit

Technicolor said it had received a "binding offer" from InterDigital for its Research & Innovation (R&I) unit, as the firm evaluates strategic alternatives for its business.

Financial terms of the offer weren't announced, but word of the proposed deal comes more than six months after InterDigital Inc. (Nasdaq: IDCC) acquired Technicolor's patent licensing business. InterDigital said the transaction would result in "moderate increase" in operating expenses after accounting for R&D tax credits from the French government and the elimination of InterDigital's $5 million annual payment obligation to Technicolor to partially fund research that originated with InterDigital's acquisition of Technicolor's licensing business last July.

In addition to helping it simplify its operating structure, Technicolor (Euronext Paris: TCH; NYSE: TCH) said the sale of its R&I activity would result in a material reduction in costs of €21 million (US $23.68 million) of adjusted EBITDA on a 2017 cost basis, starting in 2020. The proposed deal, Technicolor claimed, will also result in a payback of less than 12 months.

Focused on digital media, Techicolor's R&I unit unit has been operated and supported by about 200 researchers and engineers.

Specific activity under R&I includes a Home Experience Lab focused on future edge network technology and data analytics; an Imaging Science Lab focused on content processing, core video coding and specific projects tied to High Dynamic Range, TV user interfaces, VR color management and ATSC 3.0 (the next-gen broadcast signaling standard); an Immersive Lab focused on VR, augmented reality and light field technologies; and an Artificial Intelligence Lab.

InterDigital said members of the R&I teams in Rennes, France, and Palo Alto, Calif., will transfer to the company, and, as part of the transaction, InterDigital will provide R&D services to Technicolor.

This proposed deal adds to a recent set of transactions linked to Technicolor's acknowledgment last year that it was reviewing and evaluating strategic alternatives that could include acquisitions, combinations or divestments. Last month, Technicolor inked a deal to sell its in-home WiFi management software business to AirTies . Last year, Reuters reported that Technicolor's review could lead to the sale of its set-top box division. (See Technicolor Eyes Options, Including Sale of Set-Top Biz – Report AirTies Buys a Piece of Technicolor and Cisco Sells STB Unit to Technicolor for $604M.)

— Jeff Baumgartner, Senior Editor, Light Reading

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About the Author(s)

Jeff Baumgartner

Senior Editor, Light Reading

Jeff Baumgartner is a Senior Editor for Light Reading and is responsible for the day-to-day news coverage and analysis of the cable and video sectors. Follow him on X and LinkedIn.

Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.

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