Tseng Labs Sells Graphics Design Assets to ATI Technologies
December 16, 1997 4:04 PM EST
NEWTOWN, Penn.--(BUSINESS WIRE)--December 16, 1997--Tseng Labs, Inc. (Nasdaq National Market:TSNG) today announced the sale of its graphics design assets to ATI Technologies Inc. (TSE:ATY), a world leader in 3D graphics/video acceleration and multimedia solutions. Consideration to Tseng Labs is approximately $3 million in cash, and the assumption of certain employee incentive payments. In addition, ATI has agreed to lease Tseng's Newtown, Pennsylvania facility for at least three years, with renewal options through 2007.
Included in the sale to ATI are equipment, tools and certain rights to intellectual property. Approximately 40 members of Tseng's 3D graphics development team, including engineering and marketing personnel, have accepted an offer of employment with ATI's U.S. subsidiary, ATI Research, Inc. Tseng Labs will continue to support its currently marketed products, and is in discussions with various entities regarding ongoing rights to these products.
Jack Gibbons, President and CEO of Tseng Labs, commented, "Tseng has weathered a difficult time but we believe we have found a positive resolution that benefits our shareholders and meets our goal of positioning the Company to utilize our strong, debt free balance sheet to make acquisitions. With the completion of this transaction, our liquid assets will reach in excess of $30 million. The substantial earnings to be derived from these cash assets together with the cash flow from the lease of our facility to ATI will fully support Tseng's acquisition strategy and eliminates the need to utilize the Company's working capital."
The transaction will result in a pre-tax write-off of approximately $3.5 million. In conjunction with previously announced charges for downsizing and severance, total pre-tax charges of approximately $5.5 million will be taken in the fourth quarter ending December 31, 1997.
Tseng Labs, Inc. is a public company seeking to utilize its assets and stock to acquire growth companies in diverse industries. Tseng will continue to be based in the Philadelphia area.
NOTE: All forward looking information are estimates of Tseng Labs, Inc.'s management and are subject to various risks and uncertainties that may influence the Company's ability to execute its acquisition strategy and other risks as detailed from time to time in the Company's SEC reports and filings.
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