Imagination agrees to buy HelloSoft

LONDON – Multimedia processor IP licensor Imagination Technologies Group plc has agreed to acquire HelloSoft, a supplier of IP for video and voice over internet protocol and wireless LAN for a maximum consideration of $47.1 million and announced a share issue to help fund the purchase.

HelloSoft has a workforce of 85 people including an R&D facility in Hyderabad, India with corporate and sales offices in San Jose, California. In 2009, HelloSoft generated $1.85 million in revenue and a loss before tax of $2.34 million. As at 31 December 2009, HelloSoft had a net cash position of $0.82 million.

Imagination (Kings Langley, England) said that the acquisition is conditional and that the funding would be structured as a $20.2 million up front cash payment with up to approximately $26.9 million paid out over the subsequent three years, mainly conditional on achievement of certain financial performance criteria. The total maximum cash consideration of approximately $37.6 million is due to be funded from the net proceeds of a placement of up to 12,208,950 shares launched by Imagination.

Imagination said the acquisition of HelloSoft would give the company access to "leading-edge and highly-respected" VVoIP technology that would complement Imagination's PowerVR multimedia processor IP. As well as allowing media over IP the buy would secure control of a wireless LAN roadmap that the company was already using for its Universal Programmable Communication Platform.

Imagination said that VVoIP is of increasing importance in all the markets Imagination addresses including mobile handsets, TVs, STBs, PCs, tablets and netbooks. The company also said the deal would increase Imagination's access to Indian engineering talent and North American management.

As part of the deal HelloSoft’s founder and CEO, Krishna Yarlagadda will become the president of Imagination Technologies USA. "Having already worked together as technology partners for a number of years, I am delighted that the HelloSoft’s team has agreed to join forces with Imagination," said Hossein Yassaie, CEO of Imagination, in a statement.


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