Personal computer graphics and video processor operation Tseng Labs Inc is to sell its graphics design assets to graphics and video acceleration company ATI Technologies Inc. The sale comes after a run of consistently poor financial results for Tseng, most recently reporting nine month net losses of $5.4m from losses of $2.4m on revenue that plummeted 69.9% to $7.0m (CI No 3,277). ATI will pay $3m in cash for Tseng’s assets, as well as an unspecified amount relating to employee incentive payments. As part of the deal, ATI will rent Tseng’s Newton, Pennsylvania facility for at least three years, and has the option to renew that up until 2007. Tseng is remaining tight liped over its future, but says it is planning to acquire other companies with the $30m it should get out of the sale. There doesn’t seem to be anything left of Tseng, and a company spokesperson would not elaborate on why the company was selling its assets, saying simply it was a change in strategy. Some 40 Tseng staff have accepted offers of employment at ATI, only a handful will stay at Tseng.
