Pixelworks to sell its Semiconductor subsidiary to VeriSilicon Microelectronics

Pixelworks (PXLW) announced that it has signed a definitive agreement to sell its shares in Pixelworks Semiconductor Technology, 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. The purchase price is calculated based on an equity value of 100% of Pixelworks Shanghai of RMB 950M. Assuming all the shares of Pixelworks Shanghai are to be transferred, the total purchase price would be approximately RMB 950M, or the equivalent of approximately $133M. 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 $50M-$60M upon closing of the transaction. 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.