More Firms Get a Piece of the Philips Semi Pie

Staff Reporter -- Electronic News, 8/21/2006

Investment firms Bain Capital and Apax Partners have signed on to a private equity consortium that is acquiring an 80.1 percent stake in the semiconductor division of Royal Philips Electronics.

The expanded consortium will be comprised of Kohlberg Kravis Roberts & Co., Silver Lake Partners, Bain Capital, Apax Partners and AlpInvest Partners NV.

Philips confirmed plans to sell a majority stake in its semi business for $10.68 billion earlier this month. The company expects to receive cash proceeds, after tax and transaction costs, of about $8.2 billion.

Philips' first announcement of its intention to move away from semiconductors came in December 2005 when it announced the division would be legally separated as part of its business renewal objectives to see the division's profitability climb to between 5 percent and 15 percent and to allow Philips to focus on its other units. The business employs about 37,000 people worldwide and had sales in 2005 of $5.91 billion (4.6 billion euro).

The transaction is expected to close in Q4, and is subject to closing conditions, including governmental and regulatory approvals.