Imagination Technologies Group on Monday signed a revised agreement to acquire the operating business and certain patent properties, as well as license rights to all of the remaining patent properties, of MIPS Technologies for a cash consideration of $100 million, to be financed from existing cash resources and a new acquisition facility that has already been set up.
The revised offer has been made in response to an increased offer made to MIPS by Ceva to acquire the same assets. For Imagination, which licenses multimedia processing solutions as well as graphics processing solutions, MIPS will be a door to a brand new business: microprocessor technologies. Therefore, ImgTec increased the amount it wants to pay MIPS from $60 million to $100 million as a result of competition from Ceva, which wants the same assets.
In the 12 months to 30 June 2012 the MIPS processor licensing business generated $60 million in revenue and a loss before tax of c.US$9 million. MIPS' licensing business had gross assets of $20 million at 30 September 2012.
Considering the strategic nature of the investment for Imagination, it looks like the company will continue to increase its offered price to get its hands on MIPS, even considering the fact that $100 million seems to be somewhat overprices offering.