The terms value Imagination at around £550mln.
The news, announced late on Friday after the London market closed, sent the shares soaring 36% to 174.35p, helped by news this morning that the British company had agreed to sell its MIPS central processing unit (CPU) business for US$65mln in cash.
Imagination bought MIPS for US$60mln in late 2012. It is being sold to Tallwood, a venture capital firm based in Silicon Valley.
Imagination’s graphics chip technology is at the heart of many mobile devices but the company was dealt a crippling blow in April this year when Apple Inc (NASDAQ:AAPL) said it planned to stop using Imagination’s intellectual property in its products, as it had developed its own graphics intellectual property that it claimed was even better than Imagination’s.
Imagination was dubious, to put it mildly, that Apple could design its own graphics chips to the required specification without infringing Imagination’s patents, and asked, unsuccessfully, for further information about Apple’s designs.
Recognising it was unlikely to win a legal battle with arguably the world’s richest company, Imagination bowed to the inevitable and put itself up for sale.
Canyon Bridge, which ultimately is funded by the Chinese government, has been the most likely buyer for some time.
Intriguingly, one party that expressed an interest in buying Imagination has not yet confirmed whether it is still interested in buying the company.
Imagination is the third of Britain’s ground-breaking chip design companies to fall into foreign ownership this decade.