Imagination Owners Hire Lazard to Seek Buyers

According to reports, Canyon Bridge Capital Partners has enlisted Lazard Inc. to find potential buyers for Imagination Technologies, a UK-based chip design company. Sources familiar with the matter have revealed that the private equity firm, which has ties to Chinese state-owned investors, believes it can secure a higher price than the £550 million ($681 million) paid for Imagination in 2017. The fixed-term period for Canyon Bridge's ownership of Imagination is nearing its end.

Lazard is currently reaching out to prospective buyers and has reportedly already received several inquiries. Imagination's chip designs are integrated into products from major players like Texas Instruments, MediaTek, and Renesas Electronics, particularly in automotive electronics. Additionally, Alphabet's Google is also among its clients. The company's stakeholders believe that, with the rapid growth of AI computing, Imagination's intellectual property and chip design team have become significantly more valuable.

Graphics chip technology, which accelerates the training and running of AI software, is at the core of this surge in demand. NVIDIA has capitalized on this trend and become one of the world’s highest-valued companies. While Imagination primarily focuses on lower-performance mobile technology, which is not in direct competition with NVIDIA, many firms are working to bring AI capabilities to battery-powered devices, including smartphones.

Headquartered in Hertfordshire, UK, Imagination owns approximately 3,500 patents related to its technology, many of which were filed recently. The company also boasts a chip design team of around 650 engineers.

In other news, Imagination CEO Simon Beresford-Wylie has denied reports suggesting he plans to step down, stating that he has no specific retirement plans. He clarified that the company had authorized some Chinese customers to use its graphics processing units (GPUs) for older PC graphics card applications. However, when the U.S. government designated these customers as security risks and placed them on the Entity List, Imagination promptly ceased support for them, as providing technology to these clients now requires U.S. government approval.

Canyon Bridge, backed by the China Reform Fund Management, acquired Imagination in 2017 and privatized the company following the end of its partnership with Apple. Previously, Apple had relied on Imagination's chips to provide graphics elements for its flagship products.