Imagination, MIPS to be sold to China-, California-connected VCs

September 23, 2017 // By Peter Clarke
Imagination, MIPS to be sold to China-, California-connected VCs
Processor intellectual property licensor Imagination Technologies Group plc (Kings Langley, England) has agreed to sell off its MIPS processor business to Tallwood Venture Capital (Palo Alto, Calif.) and then to sell the remainder of itself to Canyon Bridge Capital Partners LLC (Palo, Alto, Calif.), a venture capital firm that is managing funds provided by China.

The sale of the MIPS processor business has been agreed for $65 million in cash and is expected to close in October. The sale of what remains of Imagination to Canyon Bridge is dependent on the MIPS sale and has been agreed at £550 million in cash (about $740 million) and could come into effect in November.

Tallwood VC is a stalwart of the California venture capital scene with a focus on semiconductor companies. Canyon Bridge Capital Partners is a much newer company that was recently prohibited from acquiring FPGA company Lattice Semiconductor Corp. by US President Donald Trump because of its Chinese connections (see President Trump blocks Lattice deal).

Andrew Heath, CEO of
Imagination Technologies Group plc

Imagination's board of directors has agreed to the sale of Imagination to CBFI Investment Ltd., a newly-formed company owned by Canyon Bridge Fund I LP (CBFI), which is a venture capital fund managed by Canyon Bridge Partners LLC.

Although Canyon Bridge is a new company with almost no track record, it has approximately $1.5 billion of funds under management and Ray Bingham, a former CEO of EDA company Cadence Design Systems as an executive. The funds are being provided by initial anchor partner Yitai Capital Ltd., a Chinese state-owned enterprise, according to details provided by Imagination and Canyon Bridge.

Canyon Bridge's strategy is to provide equity capital to help strong companies to accelerate growth in new markets and particularly in China, according to the Canyon Bridge website.

In the announcement of the deal it is said Canyon Bridge intends to invest in PowerVR and Ensigma R&D in the UK to allow Imagination to advance its technical position in processor IP architecture and to help it to penetrate new application sectors and geographic markets. PowerVR is Imagination's line of graphics and neural network processors and Ensigma is a line of communications IP. Canyon Bridge would also look to Imagination to develop artificial intelligence technology for such markets as augmented and virtual reality and machine autonomy, the document said.

Next: How much investment in UK?

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