UK graphics chip company 3Dlabs has agreed to be bought by one of its customers, Singapore's Creative Technology.
Creative has valued 3Dlabs at about $170m and will pay for the company in a combination of cash and stock. Creative is offering $3.60 per share, with two-thirds being converted to Creative stock and one-third to cash.
In a statement, the companies said 3Dlabs will be able to take advantage of "Creative's manufacturing, financial and distribution resources" as 3Dlabs' plans to go back into the volume desktop graphics market.
Creative has used 3Dlabs' silicon in several of its board-level graphics adapters for PCs.
3Dlabs will continue to supply, support and develop all of its product lines, including Wildcat and Oxygen, with "no expected disruption in supply to any of its customers".
The company will also supply and support chip and intellectual property cores for customers in the embedded-systems sector.
Sim Wong Hoo, chairman and CEO of Creative, said: "We see great opportunities to leverage 3Dlabs' high-end professional market leadership into higher volume PC desktop products.
"We have analysed 3Dlabs' forthcoming products and technology roadmap and we believe that their development of a scalable visual processing architecture will provide a significant competitive advantage in the graphics space."
Osman Kent, chairman and CEO of 3Dlabs, said: "We have experienced a difficult financial period during which we continued to devote significant resources to the development of our breakthrough technologies. Creative can provide us the resources and opportunity to expand our leadership position beyond the high-end professional graphics market.
"We can leverage Creative's vast experience at building global brands and market share to take full advantage of the market potential for our upcoming release of an exciting new family of graphics processors for the desktop."
3Dlabs started life as Benchmark Technologies, a UK board-level supplier of graphics accelerators for the workstation market in the 1980s. It was later bought by Du Pont to become Du Pont Pixel Systems and, later still, underwent a management buy-out. As it moved out of the board-level market at that point and into 3D chips for workstations, the company renamed itself 3Dlabs.