Technicolor Announces Sale of Patent Licensing Business to InterDigital

Technicolor has announced it will enter into an exclusive agreement under which mobile technology and research company InterDigital will acquire its patent licensing business. Technicolor will maintain its research and innovation organisation, while engaging in funded research with InterDigital.

Technicolor will receive $150 million upfront, whilst also receiving 42.5% of all future cash receipts from InterDigital’s licensing activities in the consumer electronics field beyond operating expenses. Technicolor has estimated these cash flows at a net present value of around $215 million.

The two companies will also enter into a perpetual grantback licensing agreement. Technicolor’s operating businesses paid around €15 million ($18.6 million) of royalties to its patent licensing business in 2017, a level equivalent to that of 2016. The company has estimated the value of this agreement at $108 million.