Pixelworks Backs Q4 Revenue View; Announces Equity Investment In Shanghai Unit
(RTTNews) - Video processing technology company Pixelworks Inc. (PXLW) Wednesday reaffirmed its previously provided financial guidance for fourth ...
(RTTNews) - Video processing technology company Pixelworks Inc. (PXLW) Wednesday reaffirmed its previously provided financial guidance for fourth quarter total revenue of between $16 million and $18 million. On average, three analysts polled by Thomson Reuters expect revenues of $17 million for the quarter.
Analysts' estimates typically exclude special items. Further, the company said its majority owned subsidiary, Pixelworks Semiconductor Technology (Shanghai) Co., Ltd. or PWSH, entered into an investment agreement with a group of private equity and strategic investors based in China, as well as with entities owned by PWSH employees.
Under the deal, the entities agreed to make investments in exchange for equity interest in PWSH. Employee entities have agreed to pay amounts in RMB equating to around $1.4 million in exchange for total equity interest of 0.54% in PWSH, reflecting a pre-money valuation of the RMB equivalent of approximately $250.7 million. Non-employee investors have agreed to pay amounts in RMB equivalent to around $14.3 million in exchange for total equity interest of 2.76% in PWSH, reflecting a pre-money valuation of the RMB-equivalent of approximately $501.4 million.
Following the anticipated closing of the deals, Pixelworks will continue to hold an approximately 78.2% equity interest in PWSH. President and CEO of Pixelworks, Todd DeBonis, said, "This latest transaction to secure additional capital investment in our PWSH subsidiary is a testament to the recognized value of our visual processing technology in China as well as the associated growth opportunity for this portion of our business. In addition to this new capital further solidifying PWSH's overall financial position, it provides increased flexibility in support of executing on our growth and operational objectives as we continue to prepare PWSH to apply for a local listing in coming year."