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© kheng-guan-toh-dreamstime.com Business | January 17, 2014

Tessera Technologies restructures DigitalOptics business

Tessera Technologies is restructuring its DigitalOptics business (“DOC”) to cease its remaining manufacturing operations and refocus efforts on monetizing DOC technologies, including solutions for imaging and MEMS technologies.
The changes will enable the company to return its focus to its core IP business, aiming to reduce the company’s operating costs, and provide the company with a path to improved financial performance and profitability.

These actions are the culmination of a review of strategic alternatives for DOC that was conducted in conjunction with the company’s financial advisors, the newly reconstituted board of directors and the new senior management team.

The Company expects to take restructuring, impairment and other exit charges of approximately USD 50 million to USD 55 million, with approximately 75% of that charge in the fourth quarter of 2013 and the remainder in the first half of 2014. As a result of the restructuring, the Company expects its quarterly DOC related operating expenses to be reduced by approximately USD 17 million, realized in full by the third quarter of 2014.

Tom Lacey, Tessera’s chief executive officer, commented, “After an exhaustive process of exploring multiple options, we have decided to cease DOC manufacturing operations and focus our resources in DOC on continuing to operate our image enhancement business, while also exploring new ways to realize value from our extensive DOC intellectual property portfolio, including a sale, licensing or other means.

“While the strategic process ultimately did not lead to a sale of the mems|cam business, we achieved solid proof of concept by demonstrating working mems|cam camera modules, including shipping pre-production units that generated substantial customer interest. We strongly believe that there is significant value in the related intellectual property that has been developed, including our camera module, MEMS, and image enhancement technologies.”

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