SANTA CLARA — OmniVision Technologies agreed Thursday to an increased bid for its business from a group of Chinese investors, a deal that could test U.S. regulators’ willingness to let Silicon Valley technology go to China.
Beijing private-equity firm Hua Capital Management teamed with other Chinese investors to offer $29.75 a share in cash for the company, a deal worth about $1.9 billion total. The group originally made an unsolicited bid of $29 a share in August, which was worth about $1.7 billion.
“With our new partners’ knowledge and insight and the added flexibility that we will have as a private company, OmniVision will be able to focus on reaching the next level of growth, which will benefit our employees, customers and business partners,” CEO Shaw Hong said in a statement.
Chinese investors have been looking to buy Silicon Valley chip companies, with an eye on their intellectual property and manufacturing knowledge. Milpitas-based Integrated Silicon Solution has agreed to be purchased by a Chinese consortium led by investment funds in Shanghai and Beijing for $639 million, and expects the deal to close in the third quarter.
There are doubts that the deal will be approved by U.S. regulators, however, because the Chinese firm that made the bid is partially state-controlled. OmniVision noted when the unsolicited offer was originally announced that Shanghai Pudong Science and Technology Investment is part of the investment group that leads Hua Capital Management, and that entity was established directly under the Pudong New Area government of Shanghai.
OmniVision manufactures sensors, chips and other components for cameras used in smartphones and other devices. The booming desire for its parts have pushed it into the top 50 technology companies in Silicon Valley in terms of revenue, with sales of $1.42 billion in 2014. Those components have been placed in Apple’s iPhones in the past, according to breakdowns of the Cupertino company’s popular consumer devices, but OmniVision is contractually obligated to avoid mentioning deals with Apple.
OmniVision’s products have been openly popular with Asian manufacturers of mobile devices, however: The largest customer in its 2014 fiscal year was Chinese contract manufacturer Foxconn, also known as Hon Hai, and just behind was Korean manufacturer Cowell Electronics, with the two combining for more than a quarter of OmniVision’s sales.
“We believe our unique industry knowledge and operational expertise can help accelerate OmniVision’s presence both in China and globally,” Hua Capital managing director Yue Liu said in Thursday’s announcement.
OmniVision was founded by Hong, a Chinese immigrant, and has a number of China- and Taiwan-educated managers among its senior ranks. Hong, also known as Hong Xiaoying, is expected to remain in his position, the company said.
OmniVision stock gained 5.1 percent Thursday to $27.90.
Bloomberg News contributed to this report.