mannerisms

Ruminations on the electronics industry from David Manners, Senior Components Editor on Electronics Weekly.

Private Equity Sells Off Stake In NXP

After seven and a half years NXP is no longer owned by private equity. It’s been a curious story.

In September 2006 a consortium led by KKR of New York bought the company at a valuation of $9.4 billion.

Its market cap today is $15 billion but it has liabilities of $5.4 billion – so net assets are $9.6 billion.

A curiously static figure after seven and a half years of closing factories, re-orgs and selling off businesses.

Similarly static is the revenue figure: in 2006 revenues were Euros 4.9 billion; the revenues in 2013 were $4.8 billion.

Exchange rates have been up and down but the revenue clearly hasn’t grown in all seven and a half years of PE ownership.

Profit for 2006 was Euros 325 million by the EBITA measurement; in 2013 the company made a profit of $348 million. No improvement there in seven years, again a curiously static picture.

So what, you might ask, was it all for?

Philips of course made a pile of money from it.

KKR have probably done very nicely thank you from management fees, bonuses and sundry extractions of cash.

Tens of thousands of employees have had their lives disrupted by sackings and transfers.

The bankers which put up $6 billion of debt loaded onto NXP’s balance sheet have probably been bailed out by the taxpayers.

NXP has slumped from a perennial top ten company to No.16 in the world rankings.

God save us all from private equity.

Tags: company, KKR, Private equity, Private Equity Sells

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