Transactions Sale of Private Fabless IC Company U.S. Monolithics (USM), a fabless communications chip company with particular strength in very high frequency (up to 100GHz) compound semiconductors, was a private company that had received $7 million in venture financing. Its primary investor, WildBlue, had been backed by Kleiner Perkins to provide systems for two-way Ka-Band broadband satellite service for the consumer market. The company had 20 employees, nearly all of whom were engineers, and a senior management team which was also technical in background. After initial review, we came to the view that USM had a very strong position in compound semiconductor (particularly GaAs PHEMPT) design. The company had no meaningful revenue or backlog at that time. When the deployment of Ka-Band satellite networks appeared to be slower than was previously anticipated, the company engaged Intelligent Capital. Soon after our process was initiated, the company received an offer. Based on what we were hearing in our early research, we advised the board that this early offer appeared to be low and encouraged them to allow the completion of the process. The board had to weigh our advice against the thin cash position of the company; ultimately, the board came to believe that the presence of the early offer provided increased confidence in the company's marketability. Once the board decided to pursue the full process, we developed strong parallel interest in the U.S., Europe, and Japan. We determined that the company was of interest to a broader universe than the management and board had initially considered. In this process, we engaged with GaAs IC companies, diversified IC suppliers and related foundries, optical networking suppliers, and commercial and government satellite communication equipment suppliers. As the company's cash position continued to be a factor, we required competing bidders to include a provision for a $2 million bridge note financing in the initial term sheets. The company secured the $2 million bridge financing from ViaSat in September of 2001 and closed the $30 million acquisition by ViaSat in January 2002. Intelligent Capital, Inc. was USM's exclusive advisor on the sale of the company to ViaSat.
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