Imagination Technologies sells two businesses to raise funds post Apple withdrawal

This comes after Apple declared it would no longer use the company for its chips

Imagination Technologies has declared that it is planning to sell its MIPS and Ensigma businesses in order to raise funds.

The reason behind the sale is to strengthen its balance sheet, according to a statement issued by the company.

MIPS designs a number of different embedded processors, which are found in routers, modems, wearables and IoT devices. Ensigma offers IP licensing for connectivity in mobile computing, unmanned systems and IoT.

The chip company wanted to make alternative commercial arrangements for its current licence and royalty agreement. However, Imagination also announced that it had commenced a dispute resolution procedure with Apple under its licence agreement in order to reach an agreement through a more structured process.

Imagination said that it would focus on its PowerVR graphic technologies business used in smartphones, tablets, TVs and consoles.

Apple announced last month that it would drop the Hertfordshire-based company as producer of chips for its iPhones. That business from Apple accounted for up to half of the company's revenues. Imagination tech has been in iPhones, iPads and iPods since 2008.

Apple is going to produce its own chips for devices and is expected to cease using Imagination's products in the next two years. When the news was first released last month Imagination's stock dropped by 60-70%.

Apple originally considered buying Imagination in 2016, but didn't make an offer at the time and it was later revealed that it had been recruiting talent away from the company including the COO and various engineers. This was thought to be because the company wanted to construct an in-house graphics team, which it has done as Apple will soon begin to produce its own chips.

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