SAN JOSE, Calif. -- Novafora Inc., a startup developer of video processors, has entered into a definitive agreement to acquire Transmeta Corp. for $255.6 million in cash.
The move enables San Jose-based Novafora to enter the processor intellectual-property (IP) business. Transmeta originally was involved in the x86-based microprocessor business, but the company fell on hard times and recently began to focus on IP.
Transmeta (Santa Clara, Calif.) had been looking for a buyer for some time. In September, the company said that it was up for sale and had separately entered into two agreements with Intel Corp.
As part of the new announcement, Transmeta has entered into a non-exclusive patent license agreement with Advanced Micro Devices Inc. (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.
The acquisition agreement provides, among other things, that Transmeta may not enter into any future licensing transaction prior to closing of the merger without Novafora's consent. The acquisition is expected to close in the first quarter of 2009. After the closing of the merger, Transmeta's common stock will cease to trade.
Formed in 2004, Novafora is a video processor company enabling OEMs to deliver on the promise of the digital video revolution.
Zaki Rakib is CEO and co-founder of the startup. Before Novafora, Zaki co-founded Terayon Communication Systems in 1993.
Shlomo Rakib is chairman, CTO and co-founder of the firm. He also co-founded Terayon and served as its chairman and CTO. At Terayon, he is said to have invented the S-CDMA technology that fueled Terayon's initial success and which was incorporated into the widely-adopted DOCSIS 2.0 cable data standard.