Transmeta finds a buyer

The struggling chipmaker agrees to be sold to video chipmaker Novafora for $255.6 million in cash.

Transmeta, a company that once hoped to rival Intel and Advanced Micro Devices to power portable computers, announced Monday that it would sell itself to Novafora for $255.6 million in cash.

Novafora said it hopes to use Transmeta's people and technology in its video processing chips.

"Transmeta's innovative technology and the expertise of its employees are valuable additions to Novafora," Novafora CEO Zaki Rakib said in a statement.

For their part, shareholders are expected to receive between $18.70 and $19 for each Transmeta share they own. The deal was unanimously approved by Transmeta's board, but still requires approval of its shareholders. The offer is higher than a $15.50-per-share unsolicited bid received earlier this year.

Separately, Transmeta said it has entered into a non-exclusive patent license agreement with Advanced Micro Devices (AMD). Under the terms of the agreement, AMD will transfer to Transmeta 700,000 shares of Transmeta's Series B Preferred Stock held by AMD. AMD invested $7.5 million in Transmeta last year.

The deal to sell itself puts at an end the company's efforts to figure out what to do with its technology, which was once a top-secret effort to unseat Intel in the low-power PC market.

"We believe the deal is a win for all our stockholders," Transmeta President Les Crudele said in a statement. "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."

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