Transmeta readies for sale, boosts balance sheet with Intel agreement

By Lisa Kerner

Charlotte, N.C., Sept. 24 - Transmeta Corp. has begun the process to seek a potential sale of the company with the assistance of Piper Jaffray & Co.

The company has been actively exploring a full range of strategic alternatives over the past few months, a Transmeta news release said.

Transmeta also announced two licensing agreements with Intel Corp. for some Transmeta technologies and intellectual property as well as for the accelerated payment of its receivables from Intel.

According to Transmeta, the accelerated payment will result in a one-time, non-refundable payment of $91.5 million in the third quarter of 2008.

Under a Dec. 31, 2007 settlement agreement, Intel was to make five annual future payments to Transmeta of $20 million per year in the years 2009 through 2013, it said in the release.

"Receiving these one-time payments strengthens our balance sheet and allows potential buyers to more accurately evaluate our company," chief executive officer Les Crudele said in the release.

"We expect that our intellectual property portfolio and licensing business, combined with our solid balance sheet, will be attractive to potential bidders, and we look forward to conducting a timely process to maximize value for our stockholders."

Transmeta said it expects to collect at least $265 million of cash payments for its intellectual property and patents as a result of its licensing activities.

Santa Clara, Calif.-based Transmeta develops computing, microprocessor and semiconductor technologies and related intellectual property.

Intel, also based in Santa Clara, Calif., makes and sells integrated circuits for computing and communications industries.

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