Ruminations on the electronics industry from David Manners, Senior Components Editor on Electronics Weekly.
Private Equity, NXP and Freescale.
Back in 2006 the semiconductor industry suffered a double shock as private equity reared its ugly head.
NXP was bought by KKR et al, and Freescale by Blackstone et al.
Both companies’ revenues were about the same but, in one deal NXP was valued at $10 billion and in the other Freescale was valued at $16 billion.
Now NXP has a market cap of $14 billion while Freescale’s market cap is $6 billion.
The private equity stake in NXP is now under 15% while it’s 76% in Freescale.
When the private equity companies bought NXP and Freescale they loaded them up with huige debts.
NXP still has debt of $2.5 billion, Freescale has debt of $6.39 billion.Tags: freescale, Private equity, private equity companies, semiconductor industry