O-Film signs $50 million agreement with Tessera
O-Film will be entitled to Tessera's MEMS IP license, Fotonation repaid royalties, equipment sales and sale of selected non-core patents
Tessera Technologies (and its wholly-owned subsidiary DigitalOptics Corporation (DOC)) has entered into a definitive agreement with Shenzhen O-Film Technology, (together with its affiliates, collectively O-Film).
O-Film will pay DOC $50 million in total.
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.
The transaction consists of:
$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)
$20.5 million prepaid royalty and support fee for a non-exclusive license to specific FotoNation product features
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. In addition, 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," says Thomas Lacey, Chief Executive Officer of Tessera Technologies, Inc. "We view this as an initial step in a long-term relationship with O-Film."
