Transmeta Looks To Sell Itself After Licensing Tech To Intel

Transmeta, the Santa Clara, Calif.-based developer of microprocessor and semiconductor technologies and best-known for x86-compatible software-based microprocessors featuring low power consumption and small size, will bring its eventual buyer a portfolio of intellectual property and licensing agreements, the company said in a statement.

The company on Thursday also said it has entered into two licensing agreements with Intel which will result in a one-time, non-refundable payment of $91.5 million in the third quarter of 2008.

The first agreement is a fully paid-up, non-exclusive technology licensing agreement under which Transmeta will deliver a copy of certain proprietary Transmeta computing technologies to Intel and will grant Intel a non-exclusive license to commercialize those technologies.

The second agreement is an amendment to the settlement, release and license agreement signed between Transmeta and Intel on December 31, 2007. That settlement agreement granted Intel a perpetual non-exclusive license to all current and future Transmeta patents and patent applications until December 31, 2017 in return for Intel making five annual future payments to Transmeta of $20 million per year 2009 though 2013. This amendment accelerates Intel's remaining future payment obligations.

Transmeta left the x86-based processor market in 2005, and a year later sued Intel alleging that it infringed upon ten of Transmeta's patents covering computer architecture and power efficiency technologies.

"We are very pleased to have achieved the two agreements with Intel," said Les Crudele, president and CEO of Transmeta, in the statement. "Receiving these one-time payments strengthens our balance sheet and allows potential buyers to more accurately evaluate our Company. This year, as a result of our successful licensing activities, we will collect at least $265 million of cash payments for our intellectual property and patents. 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. As we proceed with the process, we remain focused on working with potential licensees, as well as developing and validating our IP blocks so that we can broaden our target market."

Transmeta has licensing agreements with other companies, such as the one unveiled in August granting NVIDIA a non-exclusive license to Transmeta's Long Run and LongRun2 technologies and other intellectual property for use in connection with NVIDIA products in return for a one-time, non-refundable license fee of $25.0 million. The agreement also includes mutual general releases of all claims by both parties.