Amsterdam: NXP Semiconductors NV, the Dutch chipmaker owned by KKR and Bain Capital, will seek to raise $1.15 billion (Dh4.2 billion) in what would be the biggest US initial public offering this year.
NXP didn't disclose the number of shares it intends to sell or at what price in its filing with the US Securities and Exchange Commission Friday. KKR in New York, Boston-based Bain and Apax Partners of London were among the leveraged buyout funds that acquired Eindhoven, Netherlands-based NXP from Royal Philips Electronics NV in 2006. The chipmaker, which has reported losses for three straight years, plans to use the proceeds to repay debt, the filing showed.
The offering will be the largest in the US since October and comes after the Standard & Poor's 500 Index rose to an 18-month high. Private-equity firms are turning to IPOs to unload some of their $547 billion in investments after deal-making ground to a halt during the credit crisis and distributions to clients last year decreased to the lowest since at least 2000.
"You really need to have the equity markets working given the size of the companies you're dealing with," said Jack Ablin, who oversees $55 billion as chief investment officer at Chicago-based Harris Private Bank. "That's really a testament that there is a receptive audience among buyers out there."
KKR and Bain are also preparing a $3 billion IPO of HCA, people with knowledge of the matter said this month. The firms led a group that acquired the Nashville, Tennessee-based hospital chain four years ago in a $33 billion buyout.
US IPOs had stumbled at the start of 2010 as the first 14 deals were cut by 22 per cent on average, Bloomberg data show. LBO firms took some of the biggest discounts after money returned to investors last year fell to the lowest on record, according to data from London-based Preqin Ltd.
Blackstone Group LP in New York, the world's largest LBO firm, raised less than half of what it sought for Graham Packaging Company of York, Pennsylvania, in February. Generac Holdings, the Waukesha, Wisconsin-based maker of generators backed by former bankers at New York-based JPMorgan Chase's private-equity unit, cut its IPO by 29 per cent.
NXP, with 27,000 employees, makes computer chips for customers from Espoo, Finland-based Nokia to Apple of Cupertino, California, according to the filing.
The company's revenue dropped 29 per cent to $3.84 billion in 2009, while its debt stood at $5.28 billion.
Credit Suisse Group AG of Zurich and Goldman Sachs Group and Morgan Stanley in New York were hired to lead the sale. The shares will be listed on either the New York Stock Exchange or the Nasdaq Stock Market, according to the filing.
The offering would be the largest in the US since Jersey City, New Jersey-based Verisk Analytics Inc. raised $2.16 billion in October, and comes after nine of 10 US IPOs since March 15 priced within or above their forecast range.
