The Deal Of The Decade

NXP’s sale of its wireless business to ST appears to be the deal of the decade. In 2008, ST was making about half a billion dollars a quarter in wireless IC sales.

In Q1 2010, the ST-Ericsson joint venture, which absorbed NXP’s wireless assets, had revenues of $606 million.

Yet ST paid nearly $1.6 billion for NXP’s wireless business.

So ST doesn’t seem to have got a lot for its $1.6 billion.

It reminds you a bit of the $11 billion valuation put on NXP at the time it was sold to KKR.

If NXP’s CEO at the time, Frans van Houten, was instrumental in obtaining these stunning deal valuations, then he must be the dealmaker of the decade.


Comments

5 comments

  1. david.manners@rbi.co.uk

    Spot on, Anonymous, these are Dark Arts which usually end in someone getting screwed

  2. david.manners@rbi.co.uk

    Well Yes Robert, it could be the deal of the decade but it all depends on the price. KKR seem to have had a bit of trouble with it already – Deutshce Bank refusing to extend its loans and KKR having to join the underwriting team. The question is: how much of NXP do they have to sell to raise the cash they want? If they have to sell the whole of their 80% stake to raise $1.2billion then, after valuing NXP in 2006 at $11 billion, KKR will look even more foolish than they do already.

  3. Never forget that the dark face of a dealmaker is often a business killer…

  4. IMHO the deal of the decade is still to come.
    It’ll be KKR’s IPO’ing, a share, of NXP’s debt riddled carcass $1B.
    What possible term sheet valuations are they using?
    Who in their right mind would take as equity interest in NXP, given their debt load and chronic execution problems?

  5. The deal of the decade, hands down is Philips selling off NXP to KKR. Look at what KKR has managed with it’s sky-high acquisition:
    a) 1.6B for their best performing BU – mobile
    b) 500M spent in dowry to marry off the TV+STB to Trident (while earning 60% stakes) – and Trident itself is sub $1 B company. In other words, the BU was given free and the 500M was to buy the stakes.
    c) Assorted deals of some $M on smaller entities (Virage Logic, DSP)
    Now they are left with BU ID, a software entity, something around automotives and some small discretes.
    The sold assets brought in no more than $2 to 3 B. The remainder is hardly worth half of what was sold.
    Philips, for sure, knows how to win a lottery.

Leave a Reply

Your email address will not be published. Required fields are marked *

*