Pixelworks Announces Definitive Purchase Agreement to Sell its Shanghai Semiconductor Subsidiary to VeriSilicon
Rhea-AI Summary
Pixelworks (NASDAQ: PXLW) signed a definitive agreement to sell its controlling stake in Pixelworks Semiconductor Technology (Shanghai) to a buyer led by VeriSilicon for an equity value of RMB 950 million (approx. $133 million USD).
After releases of certain repurchase rights, transaction costs and China withholding taxes, Pixelworks expects to receive approximately $50 million to $60 million in cash at closing. The sale requires approval by holders of 67% of Pixelworks common stock and customary closing conditions, and the company aims to close by year‑end 2025. The agreement was unanimously approved by the Pixelworks board.
Positive
- Equity value of Pixelworks Shanghai: RMB 950 million
- Estimated cash to Pixelworks at closing: $50M–$60M
- Board unanimously approved definitive purchase agreement
- Target closing timeline: by end of 2025
Negative
- Purchase price conversion: approx. $133M but net cash substantially lower
- Deal requires 67% shareholder approval before closing
- Expected deductions include transaction costs and China withholding taxes
News Market Reaction 95 Alerts
On the day this news was published, PXLW declined 47.83%, reflecting a significant negative market reaction. Argus tracked a peak move of +9.9% during that session. Argus tracked a trough of -57.3% from its starting point during tracking. Our momentum scanner triggered 95 alerts that day, indicating high trading interest and price volatility. This price movement removed approximately $77M from the company's valuation, bringing the market cap to $84M at that time. Trading volume was exceptionally heavy at 8.3x the daily average, suggesting significant selling pressure.
Data tracked by StockTitan Argus on the day of publication.
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
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
About Pixelworks, Inc.
Pixelworks provides industry-leading content creation, video delivery and display processing solutions and technology that enable highly authentic viewing experiences with superior visual quality, across all screens – from cinema to smartphone and beyond. Pixelworks has more than 20 years of delivering image processing innovation to leading providers of consumer electronics, professional displays, and video streaming services. For more information, please visit Pixelworks' web site at www.pixelworks.com.
Note: Pixelworks and the Pixelworks logo are trademarks of Pixelworks, Inc.
Forward-Looking Statements
This press release contains "forward-looking statements" that involve substantial risks and uncertainties for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release are forward-looking statements. Examples of such statements include, but are not limited to, statements regarding the closing of the sale of Pixelworks Shanghai and the expected timing thereof; the satisfaction of closing conditions with respect to the sale, including approval by Pixelworks' shareholders; the expected amount of net proceeds from the sale; and Pixelworks' expectations regarding the use of net proceeds from the sale. We may not actually achieve the plans, carry out the intentions or meet the expectations or projections disclosed in the forward-looking statements and you should not place undue reliance on these forward-looking statements. Such statements are based on management's current expectations and understandings and involve risks and uncertainties. Actual results and performance could differ materially from those projected in the forward-looking statements as a result of many factors, including, without limitation, market and other conditions and other factors described in this press release and in our other filings with the Securities and Exchange Commission (the "SEC") from time to time. We disclaim any intent or obligation to update these forward-looking statements to reflect events or circumstances that exist after the date on which they were made, except as required by law. You should review additional disclosures we make in our filings with the SEC, including our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, and current reports and other documents that we have filed or may file in the future. You may access these documents for no charge at http://www.sec.gov.
No Offer or Solicitation
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities or the solicitation of any vote or approval.
Additional Information and Where to Find It
In connection with the proposed sale of its shares of Pixelworks Shanghai, Pixelworks expects to file with the SEC a definitive proxy statement (DEFM14A) on Schedule 14A (the "Definitive Proxy Statement"). After a Definitive Proxy Statement is filed, Pixelworks will send the Definitive Proxy Statement to its shareholders. This press release is not a substitute for the Definitive Proxy Statement or for any other document that Pixelworks may file with the SEC and send to its shareholders in connection with the proposed sale.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ CAREFULLY THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Free copies of the Definitive Proxy Statement (when available), as well as other filings containing information about Pixelworks and the proposed sale of Pixelworks Shanghai, may be obtained at the SEC's Internet site (http://www.sec.gov). You will also be able to obtain the documents filed with the SEC by Pixelworks, free of charge, in the "Investors" section of our website, www.pixelworks.com, under the heading "Investors - SEC Filings" or by requesting them in writing or by telephone from Pixelworks at: 16760 SW Upper Boones Ferry Rd. Suite 101,
Participants in the Solicitation
Pixelworks and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Pixelworks in connection with the proposed sale of Pixelworks Shanghai. Information about the directors and executive officers of Pixelworks is set forth in the proxy statement for Pixelworks' 2025 annual meeting of shareholders, as filed with the SEC on Schedule 14A on April 21, 2025. Additional information regarding the interests of those participants and other persons who may be deemed participants may be obtained by reading the Definitive Proxy Statement and other relevant documents regarding the proposed sale filed with the SEC when they become available. Copies of these documents may be obtained free of charge from the sources described above.
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SOURCE Pixelworks, Inc.
FAQ
What price did Pixelworks agree to sell Pixelworks Shanghai for (PXLW)?
How much cash will Pixelworks (PXLW) receive at closing of the Shanghai sale?
When does Pixelworks (PXLW) expect the sale of Pixelworks Shanghai to close?
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Who is buying Pixelworks Shanghai in the PXLW transaction?
Did Pixelworks' board approve the definitive purchase agreement for Pixelworks Shanghai?
