- Proceeds include sale of business and MoCA license.
- Divestiture enables ViXS to focus on core video business
Toronto, Canada, April 12, 2017 —ViXS Systems Inc (TSX: VXS), a pioneer and leader in media processing solutions, today announced that it has sold its legacy MoCA (Multimedia over Coaxial Alliance) business to MaxLinear, Inc. for US$5 million in cash. This divestiture will allow ViXS to focus on its core video business strategies, built around delivering best-in-class UHD/HDR solutions for the Consumer and Video Delivery market segments. ViXS plans to use the sale proceeds to improve its balance sheet and for working capital needed to support customers to achieve profitable growth.
The proceeds from this transaction are comprised of two parts. The first part is for a transfer of all production of ViXS’ XConnex MoCA solutions to MaxLinear. The second part involves compensation for a non-exclusive patent license, limited to the manufacturing and implementation of the XConnex MoCA business line and MaxLinear’s MoCA products. Prior to this transaction, ViXS had granted Entropic a limited license as part VIXS’ successful cross-license settlement with Entropic. This license transferred to MaxLinear when it purchased Entropic in 2015.
As a result of this transaction, VIXS will be exiting the MoCA market. ViXS began designing its own MoCA solution in 2009, as part of an earlier strategy to build integrated System-on-Chip solutions for the carrier based Set-top Box market -- a market historically dominated by the likes of Broadcom and ST-Micro Systems. Despite our engineering success in creating a MoCA business, we have determined that, ViXS was unable to achieve the cost, economies of scale, and margin synergies of ViXS’ larger competitors. The sale of ViXS’ MoCA business will free up valuable working capital previously needed to support MoCA customers. As part of this exit strategy, ViXS also recently closed its Austin office that had been primarily focused on MoCA and networking chips.
“This transaction allows ViXS to exit the legacy MoCA market and to license our IP. It also provides additional financial resources needed to support our core video business and to achieve profitable growth”, said Sohail Khan, President and CEO of ViXS. “We are proud of the success ViXS and our engineering team had in developing an organic MoCA solution. Now, this transaction allows us to focus our resources on our foundational video business targeted towards Consumer & Video Delivery segments.”
ViXS recently announced a UHD/BD product with Sharp, its Over-the-Air (OTA) customer base is growing, and ViXS continues to win new designs for UHD/HDR decoder and transcoder products. ViXS has put partnerships in place with third parties to offer complete solutions and reference designs for certain market segments, such as the OTA or “cord-cutter” market, including an OTA product partnership between ViXS and MaxLinear that was announced at CES in January of 2017. ViXS is fully committed to supporting its customer base and to continuing to provide innovative, industry leading solutions in the rapidly changing video ecosystem.
ViXS will be reporting its Fiscal Year End results on Wednesday, April 12, 2017 after-market, including a conference call, when it will discuss its financial results and on business developments in more detail.
About ViXS Systems Inc.
ViXS is a pioneer and market leader in designing revolutionary media processing semiconductor solutions for video over IP streaming solutions, with approximately 500 patents issued and pending worldwide, numerous industry awards for innovation, and over 33 million media processors shipped to date. ViXS is driving the transition to Ultra HD 4K across the entire content value chain by providing professional and consumer grade chipsets that support the new High Efficiency Video Coding (HEVC) standard up to Main 12 Profile, reducing bandwidth consumption by 50% while providing the depth of color and image clarity needed to take advantage of higher-resolution content. ViXS’ XCodePro 300 family is ideal for Ultra HD 4K infrastructure equipment, and the XCode 6000 family of system-on-chip (SoC) products achieve unprecedented levels of integration that enable manufacturers to create cost-effective consumer entertainment devices.
ViXS is headquartered in Toronto, Canada with offices in Europe, Asia and North America. VIXS™, the ViXS® logo, XCode®, XCodePro™, XConnex™ and Xtensiv™ are trademarks and/or registered trademarks of ViXS. Other trademarks are the property of their respective owners. For more information on ViXS, visit our website: www.vixs.com.
About MaxLinear, Inc.
MaxLinear is a leading provider of radio-frequency and mixed-signal semiconductor solutions for the connected home and wired and wireless infrastructure markets. MaxLinear is headquartered in Carlsbad, California. For more information please visit MaxLinear.com.
For further information, please contact:
Charlie Glavin ViXS Systems Inc. T: +1 416 646-2000 firstname.lastname@example.org Nicole Marchand Investor Relations Consultant ViXS Systems Inc. T: 1 416 646-2000 ext. 3 email@example.com
Statements in this press release that are not historical facts constitute "forward-looking statements" within the meaning of applicable securities laws. Such statements include, but are not limited to, statements regarding ViXS' use of proceeds of the transaction described in thispress release. The use of terms such as “will”, “shall”, "plans" and similar terms are intended to assist in identification of these forward-looking statements. Readers are cautioned not to place undue reliance upon any such forward-looking statements. Such forward-looking statements are not promises or guarantees of future performance and involve both known and unknown risks and uncertainties that may cause ViXS' actual results to be materially different from historical results or from any results expressed or implied by such forward-looking statements.