Pixelworks, Inc. (NASDAQ: PXLW), a leading provider of advanced video and display processing solutions, has signed a definitive agreement to sell its shares in Pixelworks Semiconductor Technology (Shanghai) Co., Ltd. (“Pixelworks Shanghai”) to a special purpose entity led by VeriSilicon Microelectronics (Shanghai) Co., Ltd.

The deal values Pixelworks Shanghai at RMB 950 million (approximately $133 million USD) and marks a significant milestone in Pixelworks’ ongoing strategic realignment.

Transaction Details

Under the terms of the agreement, Pixelworks will divest its controlling interest in Pixelworks Shanghai. The total purchase price reflects an equity value of 100% of the subsidiary. After accounting for share transfers, transaction costs, and Chinese withholding taxes, Pixelworks expects to receive net cash proceeds between $50 million and $60 million at closing.

The company also agreed with other shareholders to release certain repurchase rights in exchange for the transfer of shares of Pixelworks Shanghai for nominal consideration, simplifying the transaction structure.

Strategic Rationale

“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,” said Todd DeBonis, President and CEO of Pixelworks.

“We believe the proposed transaction represents the optimal path forward for Pixelworks, Inc. as well as for the Pixelworks Shanghai business, while also capturing the maximum realizable value for all shareholders. We look forward to receiving shareholder approval and closing the transaction by year end.”

Next Steps

The transaction, unanimously approved by Pixelworks’ Board of Directors, is expected to close by the end of 2025, pending approval from holders of at least 67% of Pixelworks’ outstanding common stock and other customary closing conditions.

This divestiture underscores Pixelworks’ focus on optimizing its operational structure and unlocking shareholder value amid evolving global market dynamics.

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