American-based GPU and AI technology firm Imagination Technologies is currently on the market, as announced by its owner, Canyon Bridge Capital Partners. A report from Bloomberg indicates that Canyon Bridge has engaged the services of Lazard Inc., a financial consultancy and asset management company, to secure a buyer. Lazard Inc. has reportedly begun receiving interest from potential buyers. The private equity fund aims to recover the GBP 550 million (around $690 million at present rates) it invested when acquiring the tech company in 2017.
The value of Imagination Technologies reached its zenith in 2012, valued close to GBP 2 billion. However, the situation shifted drastically in 2017 when Apple Inc. declared it would discontinue using Imagination’s graphics chips in its iPhones and other devices by 2019. This led to the sale of Imagination at a reduced price to Canyon Bridge, which is now looking to sell the company after holding it for eight years, coinciding with the conclusion of its investment period.
Despite no longer supplying chips to Apple, Imagination Technologies still counts major companies like Texas Instruments and MediaTek among its clients, the latter utilizing Imagination’s technology primarily for automotive chips. Additionally, Google has collaborated with Imagination to develop the Android GPU Inspector tool. Nonetheless, a December report from UK-China Transparency, a registered charity, accused Chinese firms of exploiting Imagination Technologies’ intellectual property to bolster their chip production domestically.
The report by UK-China Transparency (available in PDF format) alleges that Canyon Bridge is supported by the state-owned China Reform Fund Management. This entity is purportedly involved in transferring key assets from Imagination to Chinese chip manufacturers such as Moore Threads, Innosilicon, and Biren Technology. There were also widespread claims in 2020 that China Reform tried to assert control over Imagination’s leadership during an emergency board meeting. This meeting, aimed at appointing four nominees from the Chinese fund as directors, was aborted following significant opposition from the UK government and public outcry.
Imagination, however, refutes these allegations, maintaining that it has always complied with legal regulations and industry norms. The company argues that it would be counterproductive to sell off its main expertise and enable its clients to manufacture their own GPUs. Regardless, Canyon Bridge is optimistic about selling Imagination Technologies for a substantial profit, buoyed by Nvidia’s significant market cap growth, which it believes could spark robust interest in Imagination Technologies.
