A start-up has announced plans to acquire Transmeta Corp for $255.6 million in cash.

The move comes after Transmeta, a struggling IP licensing company that had originally played in the x86-based MPU market, put itself up for sale in September. At that time, the company also announced two licensing agreements with Intel Corp that accelerated Transmeta's payment of its receivables to result in a Q3 payment of $91.5 million.

Per its acquisition by Novafora Inc, a four-year-old developer of video processors, Transmeta may not enter into any future licensing transaction prior to closing of the merger without Novafora's consent.

However, in announcing the acquisition, Transmeta also announced that it had entered into a non-exclusive patent license agreement with Advanced Micro Devices Inc, under which will transfer to Transmeta 700,000 shares of Transmeta's series B preferred stock held by the MPU maker.

The acquisition is expected to close in Q1 2009. Transmeta stockholders are expected to receive between $18.70 and $19.00 for each outstanding share of Transmeta's common stock. 

"We are pleased with the value that we will be able to return to our stockholders as a result of this acquisition agreement with Novafora," said Les Crudele, president and CEO of Transmeta, in a statement Monday afternoon. "We believe the deal is a win for all our stockholders. We have spent the past several months extensively exploring our strategic options and believe that the agreement with Novafora best serves the interest of our stockholders."

"Transmeta's innovative technology and the expertise of its employees are valuable additions to Novafora," said Zaki Rakib, CEO of Novafora, in the statement. "Adding Transmeta's power management technology to our video processor will advance our vision of making our products applicable across the broadest range of video-oriented devices."

Transmeta reported in its Q3 results that it is a debt-free company. Transmeta's revenue for the September quarter was $25.3 million, compared with $366,000 for Q2. Net income was $30.6 million, or $2.31 per share, compared with $214,000, or $0.02 per share, in the Q2.

By: DocMemory
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