Pixelworks Announces Strategic Investment in Shanghai Subsidiary

Rhea-AI Summary

Pixelworks, Inc. (NASDAQ: PXLW) announced an Equity Transfer Agreement with Chinese private equity investors for a minority stake in its subsidiary, Pixelworks Semiconductor Technology (Shanghai) Co., Ltd. The investors will pay approximately $12.9 million USD for a 2.73% equity interest, valuing the subsidiary at about $471.5 million USD. This transaction, expected to close in September 2022, highlights strong interest in Pixelworks' technology and its growing market opportunities in Asia, while the company will retain an 80.87% stake in PWSH.

Positive

• Equity investment values Pixelworks Semiconductor Technology at approximately $471.5 million USD.
• Transaction price is nearly double the valuation from the previous investment round in August 2021.
• Significant interest in Pixelworks' visual processing technology and market opportunities in Asia.

Negative

• None.

PORTLAND, Ore., Aug. 18, 2022 /PRNewswire/ -- Pixelworks, Inc. (NASDAQ: PXLW) (the "Company"), a leading provider of innovative video and display processing solutions, today announced that it entered into an Equity Transfer Agreement with a group of private equity investors based in China ("Purchasers") for a portion of the Company's equity interest in its majority owned subsidiary, Pixelworks Semiconductor Technology (Shanghai) Co., Ltd. ("PWSH"). Collectively, the Purchasers have agreed to pay amounts in RMB equivalent to approximately $12.9 million USD in exchange for a minority equity interest of 2.73% in PWSH. The purchase price values PWSH at RMB 3.2 billion or approximately $471.5 million USD. Following the closing of the transaction, which is expected in September of 2022, Pixelworks will continue to hold an 80.87% equity interest in its PWSH subsidiary.

President and CEO of Pixelworks, Todd DeBonis, commented, "As demonstrated by this transaction representing nearly 2x the valuation of the previous investment round in August 2021, there is significant interest in both our visual processing technology and the growing market opportunity for our PWSH subsidiary. We believe this strategic investment by established private equity investors in China will serve to further support PWSH's momentum with an expanding number of mobile OEM customers and ecosystem partners in Asia."

Further details about the transaction are available in the Form 8-K filed by the Company today with Securities and Exchange Commission.

About Pixelworks

Pixelworks provides industry-leading content creation, video delivery and display processing solutions and technology that enable highly authentic viewing experiences with superior visual quality, across all screens – from cinema to smartphone and beyond. The Company has a 20-year history of delivering image processing innovation to leading providers of consumer electronics, professional displays, and video streaming services. For more information, please visit the company's web site at www.pixelworks.com.

Note: Pixelworks and the Pixelworks logo are trademarks of Pixelworks, Inc.

 

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SOURCE Pixelworks, Inc.

FAQ

What is the recent investment by Pixelworks related to its subsidiary PWSH?

Pixelworks has entered an Equity Transfer Agreement with private equity investors in China for a minority stake in Pixelworks Semiconductor Technology, paying approximately $12.9 million USD.

What stake did Pixelworks sell in its Shanghai subsidiary?

Pixelworks sold a 2.73% equity interest in its Shanghai subsidiary, Pixelworks Semiconductor Technology.

What is the valuation of Pixelworks Semiconductor Technology after the investment?

The investment values Pixelworks Semiconductor Technology at approximately $471.5 million USD.

When is the transaction for the equity investment expected to close?

The closing of the transaction is expected in September 2022.

How much equity will Pixelworks retain in its subsidiary after the investment?

After the investment, Pixelworks will retain an 80.87% equity interest in its subsidiary.