SRS offloads chip biz in management buyout

July 17, 2006 – Following its intentions stated several months ago, audio and communications technology developer SRS Labs Inc., Santa Ana, CA, has agreed to sell its Hong Kong-based semiconductor business, Valence Technology Ltd., to Noblehigh Enterprises Inc., owned by holding company Willas Array Electronics Ltd. and members of Valence’s management team.

Under terms of the deal, Valence will repurchase approximately 74% of its outstanding shares from SRS, with the remainder of outstanding shares to be repurchased by Noblehigh for $4.3 million. The move is an effort to focus attention back to SRS’ core licensing business, seen as having better growth potential with customers including Sony NEC, Samsung, Toshiba, HP, LG, and Panasonic, as well as to expand as the company’s partnerships with software customers and OEMs.

In March SRS Labs announced it would sell the Valence unit, which it estimated held only about 5% share across five market segments. The company also recorded a $3.3 million asset impairment charge as the first step in closing its investment in a joint venture with Coming Home Studios, which it formed to promote its surround sound technology.


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