FREMONT, Calif.-- ESS Technology Inc. here today announced plans to spin off its ViAlta subsidiary in an initial public offering next year. The subsidiary was formed by ESS Technology last year to address applications on the Internet.
"This new independent structure will offer benefits to both companies," said Robert L. Blair, president and chief executive officer of ESS, which supplies semiconductors and software for PC audio, digital video and communications. "ViAlta will be better positioned to take advantage of the rapid growth in Internet
applications for the living room, and ESS will be able to focus its full attention on growth of its core digital video, communications, audio and Internet appliance products."
ESS Technology currently holds 61% ownership in ViAlta, and the Fremont company said it plans to distribute its shares to its stockholders following the IPO in 2001.
ViAlta sells Internet-focused products, applications and content for the living room. In March, ViAlta introduced its first product family, which includes a multi-function Web-based videophone and a full-featured Web DVD player that connects to a standard television.
"ESS and ViAlta have become distinctly different enterprises and each operates in dynamic, rapidly growing environments," said Fred Chan, chairman of ESS Technology and ViAlta. "We believe this new structure will allow ESS and ViAlta to grow in their respective markets by giving each company a greater level of operating flexibility, management focus and attention to customer needs."