Pixelworks Announces Definitive Purchase Agreement to Sell its Shanghai Semiconductor Subsidiary to VeriSilicon

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Pixelworks, Inc., a leading provider of innovative video and display processing solutions, today announced that it has signed a definitive agreement to sell its shares in Pixelworks Semiconductor Technology (Shanghai) Co., Ltd., a company organized under the laws of the People's Republic of China and a subsidiary of Pixelworks, to a special purpose entity led by VeriSilicon Microelectronics (Shanghai) Co., Ltd. The purchase price is calculated based on an equity value of 100% of Pixelworks Shanghai of RMB 950 million. Assuming all the shares of Pixelworks Shanghai are to be transferred, the total purchase price would be approximately RMB 950 million, or the equivalent of approximately $133 million USD.

Pixelworks has further agreed with the other shareholders of Pixelworks Shanghai for a release of certain repurchase rights held by such shareholders in exchange for a transfer of shares of Pixelworks Shanghai for nil or nominal consideration. As a result, net of these transfers, transaction costs and withholding taxes in China, Pixelworks expects to receive cash in the range of approximately $50 million to $60 million upon closing of the transaction.

President and CEO of Pixelworks, Todd DeBonis, commented, "This executed definitive agreement to sell the Company's controlling interest in our Pixelworks Shanghai subsidiary is the result of our previously communicated, extensive strategic review process. We believe the proposed transaction represents the optimal path forward for Pixelworks, Inc., as well as the Pixelworks Shanghai business, while also capturing the maximum realizable value for all of the Pixelworks Shanghai shareholders. As such, we look forward to receiving approval of the sale by our shareholders in the coming months with the goal of closing the transaction by year end."

The transaction is expected to close by the end of 2025, subject to approval by holders of 67% of the outstanding shares of Pixelworks common stock and other customary closing conditions. The definitive purchase agreement was approved unanimously by Pixelworks' board of directors.