Tessera Technologies and O-Film Announce Amended Transaction
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”) have agreed to close an amended definitive agreement (the “Agreement”) with Shenzhen O-Film Tech Co., LTD. (“Shenzhen O-Film,” together with affiliates, collectively, “O-Film”) on December 2, 2014.
To date, O-Film has paid Tessera a total of $10.5 million. Pursuant to the terms of the amended agreement, O-Film will pay Tessera an additional $31 million on the closing date, consisting of a $6.5 million prepaid royalty and support fee for a non-exclusive license to specific FotoNation product features over a two year term, $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, $17 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). In addition, O-Film has an option to extend the FotoNation license agreement for an additional two and half years if it pays FotoNation an additional $10 million prior to the end of the initial term. The closing of the transaction is scheduled for December 2, 2014 as all closing conditions, including required government approvals in China and Taiwan, have been satisfied.
“We look forward to closing the agreement and are ready to support O-Film to fully monetize their investment as 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 important step in a long-term relationship with O-Film, and are honored to partner with a great technology visionary in Ricky Tsai, O-Film’s founder and Chairman. O-Film has a very impressive history of growth and we hope our partnership adds to O-Film’s mission of becoming the preeminent supplier to the mobile imaging market.”
“We are pleased to partner with Tessera to close this agreement and move to full commercialization of these differentiated and advanced technologies,” added Ricky Tsai, Chairman of Shenzhen O-Film Tech Co., LTD. “This is an important step for O-Film as we continue to move up the value chain by supplying superior solutions to our customers. We at O-Film also view this as an important step in what we hope will be a long term relationship, enabling both companies to leverage each other’s strengths in serving consumers’ demands in imaging, security, and automotive segments.”
About Tessera Technologies, Inc.
Tessera Technologies, Inc. and its subsidiaries (the Company) generate revenue from licensing to manufacturers and other implementers that use the Company’s technology in areas such as mobile computing and communications, memory and data storage, and 3-D Integrated Circuit technologies. For more information call 1.408.321.6000 or visit www.tessera.com.
Tessera, the Tessera logo, FotoNation, the FotoNation logo and Invensas Corporation are trademarks or registered trademarks of affiliated companies of Tessera Technologies, Inc. in the United States and other countries. All other company, brand and product names may be trademarks or registered trademarks of their respective companies.
Safe Harbor Statement
This document contains forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that could cause actual results to differ significantly from those projected, particularly with respect to the ability of the parties to close the transaction and our ability to develop a long-term relationship with O-Film. Material factors that may cause results to differ from the statements made include the plans or operations relating to the businesses of the Company; market or industry conditions; changes in patent laws, regulation or enforcement, or other factors that might affect the Company’s ability to protect or realize the value of its intellectual property; the expiration of license agreements and the cessation of related royalty income; the failure, inability or refusal of licensees to pay royalties; initiation, delays, setbacks or losses relating to the Company’s intellectual property or intellectual property litigations, or invalidation or limitation of key patents; fluctuations in operating results due to the timing of new license agreements and royalties, or due to legal costs; the risk of a decline in demand for semiconductors and products utilizing FotoNation technologies; failure by the industry to use technologies covered by the Company’s patents; the expiration of the Company’s patents; the Company’s ability to successfully complete and integrate acquisitions of businesses; the risk of loss of, or decreases in production orders from, customers of acquired businesses; financial and regulatory risks associated with the international nature of the Company’s businesses; failure of the Company’s products to achieve technological feasibility or profitability; failure to successfully commercialize the Company’s products; changes in demand for the products of the Company’s customers; limited opportunities to license technologies due to high concentration in the markets for semiconductors and related products and smartphone imaging; and the impact of competing technologies on the demand for the Company’s technologies. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this release. The Company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended Dec. 31, 2013 and its Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2014, include more information about factors that could affect the Company’s financial results. The Company assumes no obligation to update information contained in this press release. Although this release may remain available on the Company’s website or elsewhere, its continued availability does not indicate that the Company is reaffirming or confirming any of the information contained herein.
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