UK tech company Imagination, which designs graphics chips for smartphones, is being bought by a Chinese-backed equity firm, Canyon Bridge, for £550m. Valued at £2b in 2012, Imagination put themselves up for sale in June after Apple, its biggest customer, announced they would stop using their products in their new iPhones by 2019. Shares in the firm jumped up by 40% in early trading by Monday at 172 pence-per-share, although that is still shy of the 182p offer made by Canyon Bridge.

Ray Bingham, a partner at Canyon Bridge, said: “We are investing in UK talent and expertise in order to accelerate the expansion of Imagination, particularly into Asia, where its technology platform will lead the continued globalisation of British-developed innovation.”

The firm also said that they have no plans to cut the UK-based workforce after the takeover. Over half of Imagination’s 1,200 employees are positioned in the UK, with the rest working in Europe, the US, China and India. Canyon Bridge is based in Palo Alto, California, and is backed by state-owned Chinese fund Yitai Capital.

The buyout is conditional on the completion of a deal between Imagination and Tallwood Venture Capital selling their US unit MIPS. This is to avoid a review by the US committee on foreign investment, who barred Canyon Bridge from purchasing US chipmaker Lattice Semiconductor earlier this month.

Imagination CEO Andrew Heath called the proposed deal a “very good outcome” for shareholders, saying:  “Imagination has made excellent progress both operationally and financially over the last 18 months until Apple’s unsubstantiated assertions and the subsequent dispute forced us to change course.”

He added: “The acquisition will ensure that Imagination — with its strong growth prospects — remains an independent IP licensing business, based in the UK, but operating around the world.”