SPEA Software

» see spea.de as it lived, on the wayback machine

~ the last words ~

Computerwoche put the cause of death in the headline on 3 November 1995: SPEA capitulates before the difficulty of raising capital in the Federal Republic. The company's own chief executive, Hans-Christoph Wolf, told the paper the contracts were already signed. Thirteen days later, on 16 November, the whole of SPEA Software AG passed to Diamond Multimedia of California by share exchange, ten Diamond shares for every SPEA share, with Diamond issuing a little over two million shares to cover it.

Ulrich Seng had founded it in Starnberg, on the lake south of Munich, in 1985. It made add-in graphics boards, and for most of its life it made them well: the Fire series carried Texas Instruments TIGA processors and Intel's i860 for computer-aided design, and the V7 lines put other people's chipsets, from S3 and Tseng and Cirrus Logic and 3Dlabs among others, onto boards that ended up in a great many European PCs. In 1992 it had 109 employees and was planning 150. Turnover for 1991 was about 70 million marks, with net profit of roughly 4.4 million in 1990 and 2.5 million in 1991.

The failure was financial and it was specific. SPEA had decided in June 1992 to go public, and Computerwoche reported at the time that the approval was in place but the timing was open because the market was unfavorable. The timing stayed open. Three years later the shares were still unlisted, the company had exhausted twenty million marks of bank credit lines, and the risk capital it had raised at the end of 1994, lifting its equity from 7.3 million marks to nearly 20 million with about 10.2 million coming from venture investors led by a Dutch firm, had not been enough. In September 1995 it was still announcing a plan to list in the United States in 1997. Weeks later it sold itself instead.

~ the record ~

~ the capital that never arrived ~

Diamond's own SEC filing is blunter than the German coverage, as filings tend to be: SPEA historically had not been profitable, and a downturn in the German PC market had undercut the turnaround. Diamond went on to book an additional $8.1 million of goodwill in 1996 for inventory write-downs and unfavorable purchase commitments that had already existed on the day it bought the place.

Two valuations circulate for the deal and neither should be quoted as the price. Computerwoche's November piece worked it out at about $61.65 million on Diamond's share price that week; its December piece called it 100 million marks, Diamond's stock having moved in between. The same article noted that 100 million marks was an enormously high valuation by German standards and a fairly low one by American ones, which is a sentence about something larger than one graphics-card company.

~ what the boards did ~

SPEA bought Video Seven from LSI Logic in 1993, a detail worth getting right because German Wikipedia's account of a 1993 insolvency belongs to Video Seven and not to SPEA. In late 1994 it set up SP3D Chip Design GmbH with Philips, holding 49.5 percent against Philips' 50.5, an attempt to get into designing the chips rather than buying them. Seng himself held 50.5 percent of the voting rights on 28.4 percent of the capital, so control and ownership were not the same thing here, and the people who eventually had to approve a sale were not only him.

I started buying graphics cards around 2002, in the era when the sticker on the box said Diamond or ATI and the shop in Ankara stocked whichever of them it could get. Diamond is the one of those that had absorbed a German board maker seven years earlier without saying so on the packaging. S3 had bought Diamond in turn in 1999, so the brand on that box was already two owners past the company that is buried here.

~ the FireGL inheritance ~

The professional graphics line did not die with the company. S3 took over the FireGL division, and when S3 had become SonicBlue it sold the Starnberg operation to ATI, around two and a half years before September 2003. In that month heise reported that ATI was dissolving the Starnberg development team altogether, closing out eighteen years of graphics engineering on the Starnberger See. heise's own summary of the earlier history is the fairest epitaph the company got: Diamond acquired it, but that takeover could not stop the decline.

spea.de now redirects to nicsell, a service that auctions expiring domain names.

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