Tessera Technologies, a provider of miniaturization technologies for the electronics industry, has agreed to buy certain assets of Jerusalem-based Shellcase for $33 million. The assets include intellectual property and patents, licenses with customers, employees, and research and development production facilities, Shellcase chief executive Shalom Daskal said on Wednesday in a telephone interview. The company holding these assets will be called Tessera Shellcase. The assets San Jose-based Tessera is not buying include a 50 percent stake in a factory in China and minority ownership of a plant in Taiwan. The company holding these stakes will assume a new name and will also have the right to set up new facilities under Shellcase's licensing terms. In total, the assets are worth $30m., said Daskal. Shellcase develops packaging for microchips that is designed to facilitate their electrical connections, as well as to protect them from breaking, contamination and stress. In September it said it raised $19.4m. in an investment round, so the deal with Tessera has led to a quick return for investors, which included GlenRock Israel, Infinity Venture Capital Fund, and the Korea Global IT Fund (KGIF). Indeed, Daskal said the primary reason for the sale was the money. "It's purely a financial consideration and represents a very nice return on equity," he said. Nevertheless, the deal with Tessera matches Shellcase's recent change of strategy to one where it sells the licenses for its technology. Prior to this, customers sent Shellcase their semiconductors and it helped complete the manufacture of the chips by adding the packaging. The company also moved its manufacturing facilities to the Far East. "The transaction is a reflection of the change in strategy, which repositioned the company from manufacturing to IP, making it more attractive for a company like Tessera. It's a perfect fit," said Daskal. Daskal will act as a consultant to Tessera to help oversee the expansion of the facility in Jerusalem and to assist in the integration of Shellcase. A number of employees in business development are losing their jobs but the company is hiring new workers for its research and development operations. Shellcase''s products are primarily used in image-sensor technologies and can be found in the mobile camera telephones of Motorola, Samsung and Sanyo, and the company estimates that its "wafer-level chip size packaging" is used in approximately 30% of the world's camera phones. In addition, the technology is used in regular digital cameras and finger printing identification devices. In 2004, approximately 80 million image sensors were packaged in Shellcase's technology, Tessera said in a statement, citing a study by electronics industry consulting firm Prismark. The number is projected to rise 4.4% to 115m. units by the year end.