Imagination Technologies is for sale following a collapse in its share price linked to a falling out with its biggest customer.
Imagination Technologies, whose shares trade on the FTSE 250, lost 70% of its market value at one stage on 3 April when the world’s most valuable listed company announced plans to stop buying Imagination’s processing products and make its own alternatives.
At the time, Apple was its largest customer – accounting for around half its annual revenue – and a major shareholder.
It prompted the Hertfordshire-based company to launch a dispute resolution procedure under its licence agreement with Apple to seek new licencing terms and royalties in a bid to avoid the prospect of a costly intellectual property battle in the courts.
It later announced it was looking to sell its MIPS and Ensigma operations – focused on embedded processors and connectivity respectively.
News of the group sale helped Imagination shares rally 19% on opening.
The company said: « Imagination Technologies Group announces that over the last few weeks it has received interest from a number of parties for a potential acquisition of the whole group.
« The board of Imagination has therefore decided to initiate a formal sale process for the group and is engaged in preliminary discussions with potential bidders.
« The sale process for the MIPS and Ensigma operations, which commenced on 4 May 2017, is progressing well and indicative proposals have been received for both businesses. »
Neil Wilson, senior market analyst at ETX Capital, said buyers were keen as Imagination’s shares remained 60% down on where they were before the Apple row ahead of the market opening.
He added: « It was never going to be easy for Imagination Technologies when it lost its biggest customer and efforts to offload two of its three main businesses – MIPS and Ensigma – in a bid to strengthen the balance sheet clearly weren’t enough.
« These were both strong potential growth areas that could have delivered lasting revenue accretion to offset the loss of Apple.
« That was a pretty dire scenario, akin to selling off the family silver to keep the estate going a little longer.
« Now the shutters are up and a buyer sought. A pretty ignominious end to what was a great British tech success story. »
