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Ceva divests GPS technology, product line

Posted: 29 Jun 2006 ?? ?Print Version ?Bookmark and Share

Keywords:divestment? Ceva? GPS? GloNav? DSP core?

Ceva Inc., a licensor of DSP cores, multimedia, GPS and storage platforms, announced the divestment of its GPS technology and associated product line to GloNav, a new U.S.-based fabless company, in return for an equity ownership of 19.9 percent in GloNav on a fully diluted basis. The new company also licensed the Ceva-TeakLite DSP core for the development of its GPS chipsets.

"In the past few months, we analyzed the future market trends for GPS technology. Our research indicated that although the GPS chipset market is growing, the GPS IP licensing market will develop at a slower pace than we had anticipated," said Gideon Wertheizer, CEO of Ceva. "The transaction will allow us to concentrate our efforts on building a profitable IP licensing company while maintaining our ability to benefit from the growing GPS chipset market through our equity holding in GloNav."

Ceva will continue to promote its Ceva-TeakLite DSP core to power GPS IP-based solutions for new GloNav customers looking to integrate GPS functionality into cellular handsets and personal navigation devices. Also, under the terms of the agreement, GloNav has licensed the Ceva-TeakLite DSP core and will pay royalties to Ceva based on its future GPS chip sales.

"The resulting gain from divestment of Ceva's GPS technology and associated product line offset by impairment of GPS assets and goodwill, as well as other associated transaction costs, will be recorded in the stockholders' equity," said Yaniv Arieli, CFO of Ceva. "We currently anticipate that divestment of the GPS technology and associated product line will result in quarterly operating cost savings of approximately $700,000."

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