Irvine’s I/OMagic Corp., which designs and sells DVD drives and other computer products, is selling 70% of the company to China’s Jiangxi Greatsource Display Tech Co. for $95 million.
Jiangxi Greatsource makes what’s known as liquid crystal on silicon, chips that produce pictures for TVs and other displays. The company is backed by the Chinese government.
I/O Magic said it plans to work with Jiangxi Greatsource to develop and market TV chips in China and North America.
The companies plan to start a U.S. plant, according to Tony Shahbaz, I/OMagic’s chief executive.
The deal is set to play out in three stages. In September, I/O Magic is set to offer 8 million shares to Jiangxi Greatsource for $24 million. Next spring, a $41 million share sale is planned. By next May, a final sale worth $30 million is planned.
Jiangxi Greatsource appears to be paying a big premium for I/O Magic as a way to access the U.S. market.
Details on I/O Magic, which trades on the low-profile Bulletin Board exchange, are scarce. The best estimate for its market value is about $17 million.
Shahbaz, a former executive in Lake Forest-based Western Digital Corp.’s Asian operations, formed I/OMagic in the mid 1990s.
He draws on contacts in Asia to find makers of the company’s products, which include DVD drives, external disk drives and video and audio cards for computers.
