Imagination buys ray tracing firm for $27M

SAN JOSE, Calif. – Imagination Technologies Group plc has signed a definitive agreement to acquire for $27 million in cash Caustic Graphics Inc., a developer of real-time ray tracing graphics. Ray tracing has long been seen as an emerging technology for high-end graphics and represents a new arrow in Imagination's quiver as it battles with graphics cores from rival ARM Ltd.

Ray tracing, called the Holy Grail in graphics by analysts, is a technique for rendering 3-D images with complex lighting models to achieve photographic realism. Caustic (San Francisco) claimed in March 2009 it had a hardware accelerator that could lower the cost of ray tracing and merge the lighting models with traditional polygon-based graphics rendering.

Imagination said it will add Caustic's accelerator to its PowerVR graphics cores "in the medium term" to attack professional and specialized graphics markets as well as some mainstream consumer markets. The company's cores are widely used in consumer and mobile SoCs today, but are increasingly coming under pressure from ARM's Mali cores.

“Ray tracing has been regarded as the exclusive domain of specialised markets and non real-time applications, [but] we intend to change that," said Hossein Yassaie, chief executive of Imagination, speaking in a press release.

Caustic "will enable us to accelerate our plans to be the leading supplier of all forms of graphics technologies in all markets and to continue our mission of delivering the most advanced graphics technologies to mainstream markets,” he added.

“Our vision is to enable cinema-quality computer graphics at new cost and power consumption design point," said Chip Stearns, chief executive of Caustic, speaking in the press release.

"We are excited at the prospect of becoming part of the Imagination team as we bring ray tracing to a much broader base, and utilize their extensive resources and partnerships to bring our technology to every consumer screen,” he said.

Two years ago, Intel Corp. said it would bring ray tracing to mainstream computers with its Larrabee multicore x86 graphics processor, However, in late 2009 it scaled back its plans to focus only on chips for high-performance clusters. Intel demoed ray tracing at three events this year running on one of those chips called Knights Ferry.

In the 12 months ending in December 2009, Caustic generated $140,000 in revenue and a loss before tax of $6.2 million.  As at 30 June 2010, Caustic had debt of $3.1 million.

Caustic is selling PC cards containing its accelerator as well as software developer kits. Imagination expects Caustic to make a positive contribution to its earnings in the financial year ending in April 2013.