Creative Technology is selling its Super X-Fi audio technology-based assets and inventory to a company set up by an unnamed "management employee" for US$5 million.
Upon completion of the sale, Creative will book a net gain of some US$3 million and channel the proceeds to working capital.
According to Creative, it will receive US$1 million in ten monthly instalments and take a 40% stake in Zeica Labs, the company that is buying Super X-Fi, which is used in Creative products such as the Creative Zen Hybrid SXFI headphone.
Creative says Zeica Labs was set up by the management employee who was responsible for overseeing the Super X-Fi business and intends to pursue a business venture involving this technology.
Creative reasons that the transaction is in line with the strategic direction that the company has undertaken to streamline its business.
"This is also in alignment with the company's objective to unlock value from certain portions of its IP portfolio and enable the spin-off entity to operate with greater agility and focus.
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"The transaction will also allow the company to participate in the future growth of the spin-off entity through its equity interest," says Creative.
Creative Technology shares closed at 80 cents on Aug 27, up 0.63% for the day and down 29.2% year to date.
