New Apple deal is just the start of Imagination's ambitions

In that time, Imagination’s shares plunged 60pc, it was forced to put itself up for sale, was bought by Canyon Bridge, the Beijing-backed private equity firm, and, more recently, suggested it could need a cash injection to shore up its finances.

Then, earlier this month, Imagination revealed it had reached a new deal with Apple. The statement was a short one: “With a new multi-year licence agreement under which Apple has access to a wider range of Imagination’s intellectual property in exchange for licence fees.”

It left some scratching their heads. Why was a tie-up coming now? Had Imagination been handed a worse deal, perhaps having had to offer more concessions or take a smaller cut of royalties? Had Apple decided it just wasn’t worth developing the graphics chips in-house?

“I don’t think it’s necessary to be public,” says Black firmly, when pressed about the terms of the deal.

Of course, Apple would want it that way. The company is renowned for its strict secrecy policy, so much so that when Imagination first announced a deal between them in 2014, it wasn’t even allowed to name its new partner.

In any case, it’s hard to argue that such a partnership is not welcome news for Imagination and Canyon Bridge, the private-equity fund supported by the Chinese government – even with all the progress made in the downtime between the two deals. And there has been significant progress.

Given the concerns over such a heavy reliance on one customer, Imagination has made a real effort to diversify, pushing into automotive and striking new deals over digital dashboards in cars and the development of artificial intelligence chips.

It has also emerged a more mature company. Those bitter hostilities that grew between Apple and Imagination are now a thing of the past.

“Both parties probably didn’t do something correct,” says Black, diplomatically. When there is a public falling out, “you shouldn’t be so emotional about it”, the father-of-three adds, his voice soft and quiet. Any conflict can be resolved if “you just talk to people … and there was the change in leadership”.

It is this last point that perhaps had the largest effect on easing tensions. After all, Black was not a random hire. Brought in in late 2018, Canyon Bridge had already been vocal in wanting to rekindle the partnership with Apple. Imagination had gone through three chief executives in a year and the next one needed to be right.

Black seemed a good fit. He had a good relationship with Apple, having worked with the company before. In 2011, he sold a business to the Silicon Valley giant, which it ultimately used to create the fingerprint sensors in iPhones, though Black is tight-lipped on that previous company.

Instead he points to his reputation for turning around businesses – not least with Ray Bingham, the Canyon Bridge co-founder and partner.

“Ray was on the board of a company I fixed,” Black says. “He knows me, and because seven out of seven turnarounds I’ve done have been successful, there was just that confidence.”

When he was offered the job at Imagination, “they didn’t really tell me what to do, they just said, you’ve got to fix this,” Black says. “And that’s what we’ve done over the last year.”

He believes Imagination is in such a strong position, it is now looking at floating again. China and the US have been mooted as potential destinations.

But, Black says, nothing has been decided yet. “I think it’s premature to say where you would list, and it’s actually a rather complicated decision,” he says. “We’ve had discussions with all of the exchanges.”

The London Stock Exchange, in particular, has been keen to woo technology companies, given it has lost many of its most promising businesses in recent years – including Arm, which was bought by SoftBank, and CSR, bought by Qualcomm.

Late last year, Downing Street was reportedly in talks with the investment industry over a change in listing rules that could attract tech start-ups.

But Black will not be drawn on what has been discussed. “I hope we’re particularly attractive, being British, to the London Stock Exchange. That would be embarrassing if they didn’t like us,” he says, laughing, his guard dropping momentarily.

For now, it seems a listing will happen within the next few years, although Black will have to decide whether to delay, given the whipsawing of the share prices of fellow, listed semiconductor companies amid the ongoing trade war.

“If you’re focused too much on those macro things, you’re missing the long-term value,” he says, “but I might hold up an IPO because there’s some volatility that’s unnecessary.”

“It’s always going to go up and down,” he adds with a shrug.

Black should know. He has had enough experience in heading up listed companies, as chief executive of Wavecom, the wireless tech firm, until it was bought by Sierra Wireless, and more recently, of Rambus, the US semiconductor company.

At Rambus, Black grew the share price from $4 to $15.50, but in 2018 he was fired for misconduct. At the time, the company said this was due to an “incident unrelated to the company’s financial and business performance”.

Sources suggested the incident centred around his relationship and, later, marriage to an employee – commonly not allowed in US companies – though Black has never discussed it, and declined to comment when asked.

Nevertheless, for Black, it appears Imagination had always been on his mind. While at Rambus, sources suggested discussions around merging the two businesses had been going on for years, though nothing came to fruition. “Obviously I have confidentiality agreements with everybody so I couldn’t comment one way or another about that,” Black says quickly.

Indications that a merger or takeover by a foreign player of may have been on the cards well before the Canyon swoop will likely raise some eyebrows. After all, the takeover by the Chinese private equity firm reignited the debate over whether more protections were needed for Britain’s technology companies to ensure they weren’t swooped upon by asset strippers looking for a bargain.

For Black, being bought by Canyon has not made Imagination any less British. “I think of us as a quintessential British company without a doubt,” he says. “I don’t think it matters where the money comes from.”

“We’re a British company, but our biggest market is the US and our biggest opportunity is China,” he adds.

For now, only around 15pc of Imagination’s sales are in China, but the country is now one of the company’s biggest focuses after recent noises from Beijing about spending heavily on semiconductors to reduce its reliance on the US.

Black rejects any claims that this is part of a wider push from Imagination’s owners. After all, “if Greenland spent money on semiconductors, we’d be going to Greenland, it’s just where customers are”.

Imagination may still be in Kings Langley, a sleepy town better known for Ovaltine than hi-tech kit. But, one thing’s for certain, Black’s ambitions for the firm are anything but small town.