ATI expects the acquisition of FGL Graphics to have a neutral effect on earnings this fiscal year.
FGL Graphics, whose products were formerly part of Diamond Multimedia, develops and markets the Fire GL brand of OpenGL-based graphics accelerators for NT and Linux workstations. Under the terms of the letter of intent, SONICblue will receive $2.7 million in cash and is eligible to receive further financial consideration of up to $7.3 million, contingent upon FGL Graphics achieving future performance targets. ATI will acquire FGL Graphics' business with suppliers workstation systems (including contracts with Compaq, Dell, Fujitsu, Hewlett-Packard, IBM and Siemens), the right to use the Fire GL brand name, and 35 employees at FGL Graphics facilities in Munich, Germany, and San Jose, California.
"Our intent to acquire FGL Graphics represents a strategic investment for ATI, accelerating our entrance into the high-end workstation market by as much as two years through a combination of current OEM contracts, strong ISV partnerships and a dedicated team focused on delivering OpenGL-based technologies," said David Orton, President & Chief Operating Officer, ATI Technologies Inc. "Of equal importance to ATI is that this acquisition will further strengthen our position in the high-performance commercial desktop PC market by enabling us to drive certified and qualified Fire GL technology across future generations of ATI desktop products."