Press release

11 January 2001

Imagination Technologies Buys Ensigma

Ensigma To Form New Division With Focus On Digital Signal Processing

Imagination Technologies Group plc has agreed to acquire the entire share capital of Ensigma Limited, a private company specialising in Digital Signal Processing (DSP) algorithms and technologies for entertainment, communication and speech applications, for a maximum consideration of £5.0 million, comprising £1.8m in cash and £3.2m in shares and shares under option. £2.3m, of which £1.3m is cash, is payable on completion with the balance due over a three year earn out period based on financial performance and product development milestones. For the year ending 30 June 1999, Ensigma generated £36,000 profit before tax on revenue of £1.0m and had net assets of £1.2m. The purchase is in line with Imagination Technologies stated strategy of broadening its intellectual property for the human-computer interface through internal development and acquisition.

Ensigma will become a new division of Imagination Technologies, joining existing divisions PowerVR Technologies and VideoLogic Systems. The newly established division will continue its focus on audio and speech processing for wireless and Internet communication and will operate from its existing location in Chepstow, Wales. Ensigma customers and partners include the BBC, Hitachi, DSP Group, Texas Instruments, the Ministry of Defence, ARC Cores, Arcam, LSI Logic, Roke Manor Research, British Telecom and NEC.

Hossein Yassaie, CEO of Imagination Technologies says: “”;Ensigma will provide us with excellent expertise and state-of-the-art algorithms in the key areas of audio and speech processing and communications. The purchase of Ensigma is a logical and important step in our stated strategy of creating complementary intellectual property relating to the human-computer interface.””;

The acquisition of Ensigma means the combined Imagination Technologies divisions have IP and cutting-edge skills in key technological areas including: revolutionary 2D and 3D graphics; digital video/DVD; digital radio (DAB); consumer audio (MP3, AC3, DTS); wireless speech and audio communication and speech processing and recognition. This combined breadth of IP and expertise will enable Imagination Technologies to provide complementary and integrated solutions for human-computer interface to its partners.

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