Global chip maker continues eyeing tech start-ups for acquisitions, source says
Intel, a leading global chip maker, remains in buying mode and will continue to eye promising venture start-ups regardless of geographical location following its first takeover of a Korean tech firm, a source said on Tuesday.
The Korean firm Olaworks, a tech start-up that develops facial recognition technology for smartphones, was founded by KAIST graduate Dr. Ryu Jung-hee in 2006. Olaworks, which has 60 employees, has capital of 363 million won, and its partners and customers include Samsung Eletronics, LG Electronics and HTC, according to its website.
Olaworks’ major shareholders include Korea’s private equity SkyLake Incuvest and Intel Capital, a global venture capital fund which is part of Intel.
Intel’s 35 billion won ($31 million) acquisition of Olaworks came as the global chip giant seeks to expand into the mobile technology space, according to media reports.
Olaworks and SkyLake declined to comment. The Korean unit of Intel could not be reached for comment.
The source said that Intel did not use any advisers for the acquisition of Olaworks, as the U.S. company was already fully knowledgeable of the start-up via its VC fund subsidiary.
This is Intel’s first full acquisition of a Korean firm, although Intel Capital has so far bought equity in around 30 Korean tech firms, according to media reports. Intel Capital’s Korean portfolio includes Apack and Infraware, according to its website. The VC fund has also invested in companies in India, Taiwan and Malaysia.
Intel, with a market cap of $142 billion, had operating profit of $17.5 billion in 2011, up 12 percent from $15.6 billion a year ago. It has cash and cash equivalents of over $5 billion as of the end of 2011, according to financial statements.
Intel Korea had operating profit of 6.8 billion won in 2011, up 9 percent from 6.2 billion won a year ago. It has cash of 10 billion won as of the end of 2011, according to an audit filing. Both Intel and Intel Korea used Ernst and Young as their accountant.
By Cho Ji-hyun and Park Hyong-ki