ARC Acquires Teja Technologies to Create Software Platforms and Development Environments for the VRaptor Multicore Architecture

ARC Acquires Teja Technologies to Create Software Platforms and Development Environments for the VRaptor Multicore Architecture

Teja's Award-Winning Multiprocessor Technology will Accelerate Time to Market for ARC's VRaptor-Based Subsystems

ELSTREE, England, April 2, 2007 - (LSE: ARK) today announced that it has acquired the key assets of Teja Technologies, Inc., a privately held company based in San Jose, California and a technology leader that develops heterogeneous multiprocessor software. The acquisition includes Teja's software products, key customer contracts, its engineering team, and patents for Teja's award-winning technology.

Today ARC International also announced a series of organizational changes, some of which are associated with this acquisition, including the appointment of a Chief Operating Officer (COO) and creation of an Office of the CTO (Chief Technology Officer). See related release dated April 2, 2007 for more details.

Teja was founded in 1998 with funding from venture firms such as the Mayfield Fund and Intel Capital. Teja's customer list includes "Tier 1" companies such as Intel, Cisco Systems, Samsung, and Sun Microsystems. The acquisition of Teja provides ARC with an acclaimed software development team that will help improve existing and create new application analysis, architectural co-design, and runtime tools for products based upon ARC's VRaptor™ Multicore Architecture. These will complement ARC's current software and programming solutions, such as the MQX® operating system and MetaWare Development Toolkit.

Carl Schlachte, president and CEO of ARC International, said, "Teja is a recognized technology provider of platforms to semiconductor companies and OEMs globally. Its renowned engineering and R&D staff will extend ARC's technical leadership and help advance the development of platforms for ARC's next-generation solutions. Furthermore, the acquisition brings an immediate benefit to ARC's customers targeting the networking segment, as well as a strategic benefit for the evolution of the VRaptor Multicore Architecture."

Akash Deshpande, founder and CTO of Teja Technologies, said, "The combination of Teja's multicore software development expertise with ARC's next-generation configurable architecture technology will be a powerful combination for the global semiconductor industry. ARC has clearly achieved industry-wide recognition as a leader and quickly is becoming the solution-of-choice for multimedia SoC design. We are very pleased to play a role in increasing ARC's momentum and to become an integral part of ARC's team."

The consideration will be $5 million (USD) in cash. An initial $3.4 million is payable now with the balance to be paid in stages over two years based upon completion of performance targets. The acquisition may have a cost impact of up to $2 million (USD) on ARC's financial year 2007 operations. For the year ended December 31, 2006 Teja reported a loss of $3.3 million. The gross assets of Teja on March 30, 2007 were $900,000 (USD). Under the terms of the UKLA listing rules this acquisition is a Class 2 transaction and does not require shareholder approval.

About the VRaptor™ Multicore Architecture

The VRaptor Architecture is a new configurable heterogeneous multi-processor solution that scales to meet the demands of advanced audio, video, and high definition media processing requirements in a wide array of consumer devices. It supports multiple configurable ARC CPUs with media extensions, multiple vectorized 128-bit SIMD processors, high performance streaming I/O, and domain specific accelerators. The VRaptor Multicore Architecture implements a new active communication channels technology that provides point-to-point links in hardware between the VRaptor cores, VRaptor accelerators and VRaptor I/O elements, and carries commands as well as data. The active communication channels technology eliminates message interpretation overhead and provides for a unified programming model that simplifies the programming overhead often associated with multi-processor architectures. The ARC VRaptor Multicore Architecture will be the foundation of ARC's next-generation Media Subsystems.

About ARC International

ARC International is the world leader in configurable subsystems and CPU/ processors that are used by semiconductor companies worldwide to create system-on-chip (SoC) designs that provide a strategic competitive advantage. ARC's patented configurable products are smaller, consume less power, are less expensive to manufacture, and provide a higher degree of differentiation over what can be created using "fixed architecture" core alternatives.

ARC International maintains a worldwide presence with corporate and research and development offices in California and Elstree, UK. For more information visit www.ARC.com. ARC International is listed on the London Stock Exchange as ARC International plc (LSE: ARK).