Ziptronix, a small semiconductor technology company that spun out of RTI International in 2000, has been acquired for $39 million in cash to a publicly-traded company in California.
“We’re combining our efforts, obviously, with a proven leader in technology development and licensing,” said Dan Donabedian, president and CEO of Ziptronix. “Tessera is absolutely going to help us accelerate ... technology development and adoption” and gain new customers.
In 2014, Tessera generated $278.8 million in revenue from royalty and licensing fees, up 65 percent from a year earlier. The company boasts that its technology is in “100 percent of today’s smartphones” as well as a wide array of other electronic devices.
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Ziptronix, which has licensed its technology to companies such as Sony and Raytheon Vision Systems, has six employees – all of whom had ownership stakes in the business, said Donabedian. Sony, the No. 1 maker of image sensors, licensed Ziptronix technology for its image sensors.
Tessera plans to keep the Ziptronix brand name and all of the company’s staff at its current location on Glenwood Avenue in Raleigh, Donabedian said. He added that his title hasn’t yet been determined but he will continue to head the Ziptronix business and the company’s chief technology officer, Paul Enquist, will continue to advance the technology.
Since spinning out of RTI, Ziptronix has raised more than $30 million in venture capital, including funding from Durham venture capital firm Intersouth Partners as well as RTI and NC Idea, a private foundation in Durham.
Although the sale price doesn’t point to the kind of outsized returns that venture capitalists aim for, Donabedian said of the sale: “I think all of our investors are happy with the results.”
Intersouth’s Mitch Mumma agreed that although his firm didn’t hit a home run, it did obtain “a nice return” on its investment.
“You could say that the outcome is probably twice as good as it looks,” said Mumma, who noted that the sale price doesn’t tell the whole story from the investors’ perspective.
For one thing, he said, when Ziptronix was recapitalized in 2008, those who invested at that time – a group that included RTI and NC Idea as well as Intersouth – acquired the bulk of the ownership stake held by earlier investors. Intersouth and RTI were early investors but they also participated in the recapitalization.
Those who invested in the recapitalization “did pretty well,” Mumma said. “Patience was rewarded.”
In addition, in recent years Ziptronix was “very successful in licensing its technology” and, when it did, it paid dividends to investors – an unusual arrangement in the world of venture capital.
“There were meaningful dividends paid to shareholders,” Mumma said.
Ziptronix has a portfolio of 45 U.S. patents and 42 international patents, as well as pending applications for another 18 U.S. and international patents.
The company’s ZiBond technology enables chemical bonding of semiconductor chips, which allows them to be stacked, at very low temperatures “so you don’t destroy them,” Donabedian said. The company’s DBI technology – direct bond interconnect -– encompasses both chemical bonding and the formation of electrical connections between the chips.
“ZiBond and DBI bonding are enabling technologies that provide significant cost and performance benefits,” Craig Mitchell, president of a Tessera subsidiary, Invensas, said in a prepared statement. “There is a great opportunity to further develop these platforms with our technology partners, and we’re very excited about their market potential.”
“Tessera has a very large intellectual property portfolio,” Mumma said. “And Ziptronix’s intellectual property portfolio kind of fits inside it like a glove. It’s a really good match.”