Imagination buys Caustic Graphics for $27m

Chipmaker Imagination Technologies is to buy Caustic Graphics for $27m to bring 3D graphics to mobile phones. Imagination, whose graphics chip designs are used in Apple devices including the iPhone and iPad, was widely expected to announce another acquisition alongside its half year results today. The group, who also created the Pure radio brand, recently bought US voice over internet protocol (VOIP) operator HelloSoft for up to $47m.The acquisitions of HelloSoft and Caustic enhance Imagination's capabilities in connectivity and graphics respectively.Imagination posted record half-year revenues and profits after strong growth from both licensing and royalties.Adjusted pre-tax profit surged to £10.1m as chip unit volumes doubled to 107m, leaving the company well-placed to achieve the full year target of 200m, and licensing revenues increased. Revenue rose 16% to £44m.Royalty revenue was up 69% while licensing revenues climbed 24%. As previously announced, PURE has been impacted by the tougher economic conditions with revenues falling to £13.8m from £17.8m in 2090 as sales UK and international sales softened.Commenting on future trading, the group remained upbeat."Despite the volatile macro economy, the group remains well placed for further solid growth based on its active licensing pipeline, expected chip volume ramp and royalty growth, as well as the potential for PURE to exploit its strong product line-up and develop its new sales territories," it said in a company statement.