Tessera to receive $50 million, comprised of Fotonation prepaid royalties, MEMS IP license, equipment sale and sale of selected non-core patents.
Tessera Technologies, Inc. (NASDAQ:TSRA) ("Tessera" or the "Company") announced that the Company and its wholly-owned subsidiary DigitalOptics Corporation (together with its subsidiaries, "DOC") has entered into a definitive agreement (the "Agreement") with Shenzhen O-Film Tech Co., LTD. ("Shenzhen O-Film," together with affiliates, collectively, "O-Film") whereby O-Film will pay DOC $50 million, consisting of a $20.5 million prepaid royalty and support fee for a non-exclusive license to specific FotoNation product features, $7.5 million for a non-exclusive license for core MEMS auto-focus and other related intellectual property, an undisclosed future per unit royalty for MEMS-based camera modules, $22 million for certain manufacturing equipment and supplies, and certain non-core patents and patent applications (including patents and patent applications for Wafer Level Optics, Micro Optics and camera module technology). The closing of the transaction is expected to be completed by October 2014, and is subject to customary closing conditions, including required government approvals in China and Taiwan.
As previously announced, upon signing the letter of intent, O-Film made a $5 million non-refundable deposit applicable to the $50 million purchase price. Additionally, O-Film is required to pay DOC an additional non-refundable fee of $2 million by May 2nd to retain an option to purchase leasehold improvements related to DOC's Taiwan manufacturing facility. O-Film is responsible for substantially all MEMS-related operating costs, including DOC's Arcadia facility, from the signing of the agreement through the close of the transaction, in exchange for DOC's cooperation to prepare the facilities for operation by O-Film following the closing.
"We are pleased to enter into this agreement as it represents our first MEMS intellectual property licensee, and a substantial licensee of our industry-leading smartphone imaging FotoNation technologies focused primarily on the China market," said Thomas Lacey, Chief Executive Officer of Tessera Technologies, Inc. "We view this as an initial step in a long-term relationship with O-Film."
About Tessera Technologies, Inc.
Tessera Technologies, Inc. is a holding company with operating subsidiaries that create, develop and license innovative semiconductor, interconnect and imaging technologies. Tessera and its subsidiaries generate revenue streams from manufacturers and other implementers that utilize our innovative technology. Tessera's semiconductor packaging technologies have been licensed to more than 70 companies. More than 100 billion semiconductor chips have shipped with the company's intellectual property. Tessera seeks to expand the use of its product and technology offerings in the tablet, laptop and smartphone markets.
For more information call 1.408.321.6000 or visit www.tessera.com.