Technicolor receives InterDigital offer for R&I activity | Major Businesses | Business
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Continuing its current corporate plans to divest assets, Technicolor has revealed that it has received a binding offer and entered into exclusive negotiations with mobile technology research and development company InterDigital for the sale of its Research & Innovation business.

technicolor 7 sept 2017R&I is a premier research lab that conducts fundamental research into video coding, IoT/smart home, imaging sciences, artificial reality, augmented reality and artificial intelligence/machine learning. The unit was the driving force behind a patent portfolio acquired by InterDigital from Technicolor in July 2018. Technicolor’s R&I team includes leaders in fundamental standards like HEVC, ATSC 3.0 and other video coding technologies.

“Acquiring R&I is a decisive step in the creation of InterDigital’s video R&D and licensing business... With this transaction, InterDigital creates an extraordinarily powerful research engine that will deliver fundamental innovation into two major markets: the wireless market, our long-time leadership area, and the video, display and consumer electronics market, a market with roughly the same revenue potential as the wireless market and which is a greenfield opportunity for us,” noted InterDigital president and CEO William J. Merritt. “Equally important, this transaction does not affect our commitment to diligent cost control and high operating leverage.”

With InterDigital’s acquisition, Technicolor believes that it can significantly reduce its costs by around €21 million starting in 2020, representing a payback of less than 12 months. Yet the deal would also see Technicolor’s right to receive 42.5% (beyond operating expenses) of the future royalties from InterDigital’s licensing activities in the consumer electronics field amended. As a result of various adjustments, Technicolor’s future cash receipts would be reduced by 50% compared with the previous net present value estimation.

“This proposed transaction continues the simplification of the Group’s structure while ensuring that its R&I teams join a world class technological organisation,” commented Technicolor chief executive officer Frederic Rose. “As a result, Technicolor will henceforth be able to focus its resources solely on its operating businesses.”

InterDigital acquired Technicolor’s patent licensing business in 2018, and the new transaction would be structured as an asset purchase with a concurrent R&I cooperation agreement. The deal comes on the heels of AirTies announcing plans to acquire Technicolor’s in-home Wi-Fi Management software business.