Home |  Directory |  Search |  GET LISTED! | Services | Advertise? | FAQ | Link to Us | Contact

Category: Embedded Business News

Freescale Semiconductor Bought Out by Blackstone for $17.6 Billion

By Bill Giovino
Sep 25, 2006 - 7:08:00 PM

 
Freescale Semiconductor Bought Out for $17.6B
Email this page Printer friendly page

Share: Share this on LinkedIn ReTweet This Share on Facebook
del.icio.us Yahoo! MyWeb Digg StumbleUpon reddit Furl Blinklist Spurl  

Subscribe to this RSS feed!

On Friday, September 18, several private equity firms led by The Blackstone Group have agreed to buy Freescale Semiconductor for a record-breaking asking price of $17.6B. Freescale's board of directors unanimously approved the deal. The buyout must be approved by Freescale's shareholders and regulatory agencies.

Freescale Semiconductor Bought Out by Blackstone for $17.6 Billion
Freescale Semiconductor, formerly known as Motorola Semiconductor, was spun off by Motorola Inc in December 2004 after months of denials. Freescale had been losing money prior to the spin-off but has since become profitable. After the spin off, Freescale cut 1,350 employees and sold a wafer fab in Tianjin, China to SMIC. In 2005, Freescale cut 430 manufacturing jobs and 260 non-manufacturing jobs. Freescale has also discontinued some low-profit product lines.

Freescale Semiconductor is a major supplier of Automotive, networking, and wireless communications semiconductors. While Freescale is presently a leading microcontroller supplier, with the exception of Automotive they have ceded dominance of the 8-bit marketplace to Microchip, and their dominance as the lead Automotive chip supplier is being threatened by ST Microelectronics (editor's note: I helped spearhead ST's first microcontroller market penetration).

With 24,000 employees worldwide, Freescale had chip sales in 2005 of $5.84B and a profit of $584M. In the second quarter 2006, Freescale had net sales of $1.60B with a profit of $260M. Gross margin was 46.0%, up 0.7% from 2Q2005. Freescale has seven wafer fabs and two assembly and test facilities

The Terms
Blackstone Group LP lead the buyout deal, along with Texas Pacific Group of Fort Worth, Texas, The Carlyle Group of Washington and Permira Advisors LLP of London. The investors will be paying $40 a share, 30% above the stock's asking price.

Freescale Semiconductor Bought Out by Blackstone for $17.6 Billion
Bidding for Freescale's board solicited buyout had been fierce. Others in the fray included Kohlberg Kravis Roberts & Co, featured in the movie "Barbarians at the Gate", and Silver Lake Partners.

Freescale's board may continue to solicit bids for the Company for the next 50 days; however, if Freescale's shareholders do not agree to go through with the Blackstone buyout, it will be forced to pay a $300M deal break-up fee.

An Analysis of Freescale's Future (by Bill Giovino!)
Neither Freescale nor Blackstone has filed a business plan on the future of Freescale. Public statements have not been specific as to future plans. Statements to Freescale employees have been reassuring, but vague as to Freescale's future, reminiscent of the months of denials of a Semiconductor spin-off before Motorola Inc. spun off Motorola Semiconductor.

While is appears that the investment group will structure the buyout with a combination of private equity and borrowed funds, it's clear that Freescale will be saddled with significant debt.

It's my analysis that Freescale will have no option but to streamline it's bureaucracy as well as obsolete more older, low margin and niche products. It's also my guess that Freescale might sell off a combination of it's analog product lines. Profitable possibilities include the power management, RF, and infrared products, or even their power amplifiers. Possible wafer fabs that could be sold off are the East Kilbride and Tempe fabs, with the East Kilbride RF fab being the most vulnerable to a sale. This would allow Freescale to focus more carefully on their more successful market segments and digital products.

***18-Nov-2006***
Financing for the deal has just been announced:
http://www.businessweek.com/magazine/content/06_48/b4011075.htm

***10-Oct-2008***
Freescale Leaves Power Management and RF Business

© Microcontroller.com. All Rights Reserved.

Freescale Semiconductor Bought Out by Blackstone for $17.6 Billion

This Article has been seen 29920 times

Product data and specifications in this article are the responsibility of the manufacturer. No warrenty is expressed or implied as to the accuracy of manufacturer-supplied data. So there.
Embedded Systems News  - Recent Headlines
·Microchip PIC32MZ Flash Microcontroller is the World's Fastest 32-bit MCU
·Microchip PIC24F KM Webinar
·Choosing A Microcontroller Architecture Part 1
·New Atmel SAMD20 Cortex-M0+ Microcontrollers
·Silicon Labs Buys Energy Micro
·Zilog Buys Microcontroller Product Lines from Samsung
·Texas Instruments introduces new Tiva ARM Cortex-M4 Microcontrollers
·You Might Be an Engineer If
·Microchip and Digilent Bring Arduino to PIC32 Microcontrollers
·Atmel SAMA5D3 has Lots of Power and Linux Development
·The Good Ol Days of Semiconductors Part 2
·Renesas RL78-G14 Microcontroller Demo Kit is a Neat Tool Toy
·National Semiconductor - the Good Ol Days of Semis
·Microchip Introduces MPLAB XC32++ Free PIC32 C++ Compiler
·Freescale Kinetis L-Series Based on ARM Cortex-M0+ Core
·Microchip Introduces 8-bit PIC16F145X/PIC18F97J94 with Crystal-Free USB LCD and EEPROM
·Silicon Labs C8051F37x/C8051F39x 8-bit Microcontrollers have EEPROM and Really High Resolution Analog
·STMicroelectronics Introduces STM32-F3 with FPU
·LinkedIn Hacked, Passwords Please No Salt
·Silicon Labs Buys Ember

Main Menu
Site Status Now
  • ·34 Online Now
  • ·7094 Total Online Since 9/28/2016 2:20:32 PM boot
  Partners

SFO Takumi - Motor Control ICs

SFO Takumi's Kyopal line of ULTRA-high accuracy Motor Control ICs simplify the design of motor control applications by providing high resolution, motion smoothness and system robustness.
 
Supports 2, 4, and 8 axes control for all stepping motors and pulse train input type servo motors. Get some...


Dependable Designs: Fast, Friendly, and of Course, Dependable!

Looking for a quick-turn Embedded Systems Design Engineering Service? Welcome to Dependable Designs.

Need a complex design for your startup company? Or something as simple as a college project? Outsource your Engineering services to friendly, experienced people. Click to learn more...


Getting Listed

Submit Your Website to this Embedded Systems Directory
Drive traffic to your website. Benefit from exposure to our tens of thousands of monthly visitors, get extra traffic for your embedded systems related website, and increase your search-engine ranking with a link in our directory. Here's how:


Resources

Mobile Web Made Easy


Recent Microcontroller.com visitors where location can be determined.

Embedded Systems News 
Embedded System Product News
Development Tools News
Embedded Business News
Embedded Networking
Embedded IP
Bits and Bytes
Embedded Systems News 
Latest Headlines
Microchip PIC32MZ Flash Microcontroller is the World's Fastest 32-bit MCU
Microchip PIC24F KM Webinar
Choosing A Microcontroller Architecture Part 1
New Atmel SAMD20 Cortex-M0+ Microcontrollers
Silicon Labs Buys Energy Micro
Zilog Buys Microcontroller Product Lines from Samsung
Texas Instruments introduces new Tiva ARM Cortex-M4 Microcontrollers
You Might Be an Engineer If
Microchip and Digilent Bring Arduino to PIC32 Microcontrollers
Atmel SAMA5D3 has Lots of Power and Linux Development
Home |  Directory |  Search |  GET LISTED! | Services | Advertise? | FAQ | Link to Us | Contact
-0-9/29/2016