Pixelworks, Inc. (NASDAQ:PXLW)
Pixelworks, Inc. (NASDAQ:PXLW) has signed a definitive agreement that paves the way for it to complete the acquisition of media processing and transcoding solutions provider ViXS Systems. The company has agreed to buy all outstanding common shares of the Toronto-based company in an all-stock transaction valued at $20.2 million.
The all-stock transaction consists of 3.7 million shares of Pixelworks, Inc. (NASDAQ:PXLW) common stock. Each common share of ViXS is to be exchanged for $0.04836 of a share of Pixelworks common stock. Based on a 60-day trailing average stock price, the transaction represents a 47% premium.
The transaction is still subject to a number of closing conditions including approval by an Ontario Superior Court Justice. ViXS shareholders will also have to unanimously approve the deal in an upcoming vote.
ViXS is to hold an annual special meeting of shareholders on July 28, 2017, to deliberate on the merger and vote. The board of directors of the two companies have already given the green light for the merger to proceed.
Pixelworks, Inc. (NASDAQ:PXLW) is acquiring ViXS as part of an effort to strengthen its current patent portfolio with the addition of 470 issued and pending patents worldwide. The transaction should also give the company access to new product offerings that should further diversify its revenue base and target market. The company is also planning to advance ViXS industry Leading Cord Cutter Platform that seeks to address the needs of people viewing broadcast video and content.
Pixelworks, Inc. (NASDAQ:PXLW) president and chief executive officer, Todd DeBonis, expects the deal to deliver meaningful value to shareholders as well as the two company’s customers. The transaction is expected to be accretive to Pixelworks full year 2018 earnings.
“Today’s announced acquisition of ViXS represents a unique opportunity to strengthen our position as a known technology leader with extensive visual and video processing expertise. In addition to adding highly complementary technology and product offerings, the transaction is expected to provide the potential to meaningfully accelerate the development of comprehensive end-to-end video streaming solutions, “said Mr. DeBonis
ViXS CEO, Sohali Khan, on the other and expects the deal to present a compelling growth opportunity as they target greater scale and market penetration. By merging with Pixelworks the company is also looking towards gaining access to world-class engineering and technology much needed to monetize industry evading innovation.
Pixelworks, Inc. (NASDAQ:PXLW) stock was down by 6.8% in Friday trading session ending the week at $5.48 a share.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.