Canyon Bridge Capital Partners, the private equity owner of UK-based chipmaker Imagination Technologies, has enlisted investment bank Lazard to explore a potential sale of the business it acquired for £550m in 2017, according to a report by Bloomberg.
With the fund which owns Imagination nearing the end of its fixed term, Canyon Bridge, which has ties to Chinese state investors, believes the company could fetch a higher valuation now, thanks to growing demand for artificial intelligence (AI) technology. Lazard has reportedly begun reaching out to potential buyers, with initial inquiries already received.
Representatives for Lazard, Canyon Bridge, and Imagination declined to comment on the sale process.
Imagination Technologies designs chipsets and licenses its graphics processor unit (GPU) intellectual property to major tech companies, including Texas Instruments, MediaTek, Renesas Electronics, and reportedly Google. Its technology is widely used in applications such as in-vehicle electronics and robotics.
The Hertfordshire-based company has about 3,500 patents and a team of 650 chip engineers, making it a significant player in the semiconductor space. With the rapid growth of AI computing and the increasing use of graphics chips in AI accelerators, Canyon Bridge believes Imagination’s intellectual property has become even more valuable.
Unlike industry leader Nvidia, which dominates high-performance AI chips, Imagination focuses on mobile and lower-power versions of the technology. These are aimed at enabling AI in battery-powered devices such as smartphones.
Imagination’s relationship with Apple, once a key customer, has shaped much of its history. After Apple shifted to designing its own chips in 2017, Imagination’s stock plummeted, prompting Canyon Bridge’s acquisition and the company’s privatisation.
Although Apple and Imagination later struck a multi-year licensing deal, the company’s reliance on other markets, including automotive and robotics, has helped it diversify. However, it faced scrutiny over licensing its GPUs to Chinese customers, some of whom were added to the US government’s Entity List for security concerns. Imagination has since ceased supporting those entities, according to CEO Simon Beresford-Wylie.
