NXP Semiconductors’ impending acquisition of Freescale Semiconductors should have no negative effect on Freescale’s recent purchase of Gatineau-based CogniVue Corporation, CogniVue’s former CEO says.
Simon Morris, who is now leading the Freescale/CogniVue transition, said he has talked with NXP management, adding it approves of the acquisition.
“They consider automotive and automotive vision, what we call ADAS or automotive driver assistance systems, to be strategically and critically important to the growth of the business,” Mr. Morris said in a recent interview with OBJ.
Mr. Morris said he expects the CogniVue team will work under the Freescale banner until the NXP acquisition is complete later in the fall.
The decision to focus on the automotive industry has already been a strategic success for CogniVue, which was spun off in 2010 from MtekVision, a South Korean semiconductor firm. The spinoff plan was focused on developing low-power vision processing technology.
“We felt vision would be adopted quicker in automotive and potentially the risk profile of our company, basically a small R&D company based in Ottawa, Canada, would be less severe an issue for the automotive companies … if we had a significant technology advantage over the large incumbent players in the space,” Mr. Morris recalled.
“That turned out to be the case. We actually guessed right.”
Mr. Morris said the company “did whatever we could to survive,” living on “loans, grants, initial sales, design service contracts,” until it secured a big win in 2012 when it signed a licensing deal with Freescale.
The company built on that, Mr. Morris said, and then attracted series A investment in 2013, driven largely by Ottawa’s Purple Angels.
As CogniVue continued to promote its technology to other semiconductor companies, the importance of its products to the automotive industry became “particularly more acute,” Mr. Morris said.
“Of course, there was also a pickup in other markets that are emerging like the drone market and robotics, so there was a tangential market interest in our technology for these other spaces, including mobile phones,” he said.
Mr. Morris said a series B round was underway when Freescale and two other companies came around “kicking the tires on M&A.”
CogniVue’s board liked Freescale’s offer the best, Mr. Morris said, adding the company’s previous working relationship was a contributing factor.
“Bottom line is the board and the shareholders were looking for the best return on their investment. That was paramount,” he said. “For the employees, this was a great exit because they know the Freescale team quite well and we’ve been working very intimately with them for the last few years, so this was an obvious exit for the employees themselves.”
Mr. Morris said he expects the NXP/Freescale team will continue to invest in Ottawa, expanding on the presence it has had in the capital since Freescale acquired Seaway Networks in 2005. He said he expects “heavy” investment in vision technology for the automotive sector and other markets.
Mr. Morris said neither Freescale’s Kanata office, which has 45 employees, nor CogniVue’s 25-person Gatineau office will be large enough to accommodate the joint venture, so the combined company will be moving to a new space once CogniVue’s lease expires in the spring.
Until then, it is business as usual on Eddy Street, and Mr. Morris said that includes CogniVue’s collaboration with the vision lab at the University of Ottawa.
“Freescale will be investing in that relationship as well,” he said.