US chip maker turned intellectual property  licensor Transmeta Corporation yesterday said that it had initiated a process to find a potential buyer for itself, even as it announced two agreements with Intel accelerating the annual technology and intellectual propert licensing payments from five year into a one-time, non-refundable payment of $91.5 million in the third quarter of 2008.

The deal with Intel, one of the two it sgned with the chipmaker, would enable Transmeta to strengthen its balance sheet prior to its sale. Last year, Transmeta entered a technology licencing deal with Intel in December 2007, 10 months after filing an intellectual property lawsuit against it, and settled for an initial $150 million, and five annual payment of $20 million a year between 2009 and 2013 for a perpetual non-exclusive license to all Transmeta patents and patent applications, including those acquired by Transmeta before 31 December  2017.

The annual payment will now be consolidated into one and paid as a on-time consolidated $91.5 million before the end of Transmeta's current fiscal quarter ending 30 September 2008.

"Receiving these one-time payments strengthens our balance sheet and allows potential buyers to more accurately evaluate our company," said Les Crudele, president and CEO of Transmeta. "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."

Crudele said the company expect its intellectual property portfolio and licensing business, combined with "our solid balance sheet", to be attractive to potential bidders. It is being advised by financial advisors Piper Jaffray & Co.

"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," he added.

The second agreement is a fully paid-up, non-exclusive technology licensing agreement that provides for Transmeta to deliver a copy of certain proprietary Transmeta computing technologies to Intel and grants to Intel a non-exclusive license to use and exploit those technologies commercially.

Transmeta has been under pressure from its largest shareholder, Bryant Riley, who owns 12.1 per cent of Transmeta's shares. In January sued the company for "mismanagement, wrong doing and breach of fiduciary duties" and gave up his proxy fight with the company for a board seat for himself and two nominees and an agrement to limit future shareholding to 13 per cent.

Transmeta Corporation develops and licenses innovative computing, microprocessor and semiconductor technologies and related intellectual property. Founded in 1995, Transmeta first became known for designing, developing and selling its highly efficient x86-compatible software-based microprocessors, which deliver a balance of low power consumption, high performance, low cost and small size suited for diverse computing platforms.

Transmeta is presently focused on developing and licensing its advanced power management technologies for controlling leakage and increasing power efficiency in semiconductor and computing devices, and in licensing its computing and microprocessor technologies to other companies.