WILMINGTON, Del., Feb. 11, 2019 (GLOBE NEWSWIRE) -- InterDigital, Inc. (NASDAQ: IDCC), a mobile technology research
and development company, today announced that it has made a binding offer to acquire the award-winning Research & Innovation
(R&I) unit of Technicolor SA (Euronext Paris: TCH) (OTCQX: TCLRY), a worldwide technology leader in the media and entertainment
sector. Upon completion of the transaction, InterDigital would become an unquestioned leader in both wireless and video research,
with R&D-backed portfolios addressing the mobile, consumer electronics, IoT, and other markets.
In order to accommodate French labor law, InterDigital has made an irrevocable offer to Technicolor and certain of its
subsidiaries to purchase Technicolor’s R&I unit. After completing the required prior consultation with Technicolor’s works
council, the companies expect to execute a definitive acquisition agreement, the terms of which have been negotiated. The
transaction is expected to close in mid-2019, subject to customary closing conditions.
As consideration for the acquisition, the parties have agreed to terminate the jointly-funded R&D collaboration that was
entered into as part of InterDigital’s acquisition of Technicolor’s licensing business. In addition, Technicolor has agreed to
reduce its rights to a revenue-sharing arrangement announced as part of InterDigital’s acquisition of Technicolor’s licensing
business. There is no cash consideration.
With engineering teams in Rennes, France, and Palo Alto, California who will transfer to InterDigital, R&I is a premier
research lab that conducts fundamental research into video coding, IoT / smart home, imaging sciences, AR and VR and artificial
intelligence / machine learning. The unit was the driving force behind the 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. Like InterDigital Labs, R&I also enjoys partnerships and collaboration with world-class universities and
researchers around the world.
“Acquiring R&I is a decisive step in the creation of InterDigital’s video R&D and licensing business, which began with
the acquisition of Technicolor’s licensing business last year. With this transaction, InterDigital creates an extraordinarily
powerful research engine that will deliver fundamental innovation into two major markets: the wireless market, our longtime
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. Equally important, this transaction does not affect our commitment to
diligent cost control and high operating leverage,” said William J. Merritt, President and CEO of InterDigital.
As part of the transaction, InterDigital will deliver R&D services to Technicolor. The agreement would support Technicolor’s
continued leadership in immersive technology.
Financial Guidance
- The transaction will result in a modest increase in operating expenses after taking into account R&D tax credits from the
French government and the elimination of InterDigital’s $5 million annual payment obligation to Technicolor to partially fund
research. This obligation originated in connection with InterDigital’s July 2018 acquisition of Technicolor’s licensing business.
- A portion of the operating expenses will be paid through research contracts with Technicolor’s business units.
- InterDigital remains committed to restoring recurring costs, net of the proceeds from the above-noted research contracts, to
2017 levels.
- Unrelated to this latest transaction, InterDigital noted that it expects its fourth quarter 2018 operating expenses to be at
the top end of the range communicated at our Investor Day held on December 10, 2018. We expect our fourth quarter 2018 operating
expenses will include approximately $9 million related to one-time charges, including $4 million of non-cash charges related to
the July 2018 acquisition of Technicolor’s licensing business.
About InterDigital®
InterDigital develops mobile technologies that are at the core of devices, networks, and services worldwide. We solve many of
the industry's most critical and complex technical challenges, inventing solutions for more efficient broadband networks and a
richer multimedia experience years ahead of market deployment. InterDigital has licenses and strategic relationships with many of
the world's leading wireless companies. Founded in 1972, InterDigital is listed on NASDAQ and is included in the S&P MidCap
400® index.
InterDigital is a registered trademark of InterDigital, Inc.
For more information, visit: www.interdigital.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934,
as amended. Such statements include information regarding our current beliefs, plans and expectations, including, without
limitation, (i) our plans to acquire Technicolor’s R&I unit; (ii) our expectation that we will execute a definitive acquisition
agreement; (iii) our expectation that the transaction will close in mid-2019; (iv) our belief that the acquisition will result in
InterDigital becoming an unquestioned leader in both wireless and video research; (v) our belief in the revenue potential of the
consumer electronics market; (vi) our timeline for meeting our recurring cost goals; (vii) our expectations about our fourth
quarter 2018 operating expenses; and (viii) our expectation that the net impact of the transaction on our operating expenses will
be modest after taking into account R&D tax credits from the French government. Words such as “will,” “would become,” “expect”
and variations of any such words or similar expressions are intended to identify such forward-looking statements.
Forward-looking statements are subject to risks and uncertainties. Actual outcomes could differ materially from those expressed
in or anticipated by such forward-looking statements due to a variety of factors, including, without limitation, those identified
in this press release, as well as the following: (i) regulatory or other limitations on the ability of the parties to consummate
the transaction; (ii) our ability to leverage the acquisition to become a leader in both wireless and video research; (iii)
unexpected delays or difficulties related to InterDigital’s R&D efforts; (iv) InterDigital’s ability to generate revenue
through our new licensing efforts in the consumer electronics field; (v) Technicolor’s credit-worthiness; (vi) the continued
availability of research tax credits from the French government; and (vii) the finalization of accounting and valuation analyses
related to the transaction.
InterDigital undertakes no duty to update publicly any forward-looking statement, whether as a result of new information, future
events or otherwise, except as may be required by applicable law, regulation or other competent legal authority.