Selected Transaction: Equity Financing

The Client

CPU Technology is a rapidly growing embedded systems company headquartered in Pleasanton, CA. CPU Tech's technology facilitates the development of complex electronic systems for mission critical applications. CPU Tech's extensive multi-year R&D efforts assume vital importance in the new generation of computer technology based on System-on-a-Chip ("SoC") solutions.

The Assignment

Context Capital Group ("Context Capital") was retained by the Shareholders of CPU Tech to seek and review strategic alternatives in order to best position the Company for a large number of growth opportunities.

A technology company with over 10 years of experience in SOC technology, CPU Tech needed additional resources for research and development, additional personnel, expanding business development efforts and general working capital purposes.

Context Capital performed extensive industry research and provided the Shareholders of CPU Tech a comprehensive overview of the Company's position and value in the market place.
Context Capital's strategic review of the Company suggested that growth equity financing would meet the Company's current and future needs. As a result, Context Capital coordinated the entire financing process - from contacting potential private equity investors, to distributing the Company's business plan to negotiating with the most favorable financing sources to arrive at a valuation acceptable to the Shareholders of CPU Tech. After significant discussions and valuation comparisons, Context Capital and the Shareholders of CPU Tech concluded that The Carlyle Group was the most desirable partner based on a combination of financial and non-financial
resources.

Subsequent to this transaction, Price Paschall, Managing Director at Context Capital was asked to join the board of directors of CPU Tech.