During the past week, two tech companies decided to go private: Intergraph ($1.3 billion) and Embarcadero Technologies Inc. ($234 million).
Well, these deals are small-time compared to the possible buyout of Freescale Semiconductor. This is according to a NY Times article, which pegs the valuation of the transaction at $16 billion. This would exceed the $11.3 billion deal for SunGard Data Systems.
Actually, this is not the only semiconductor company to be targeted for a buyout. In August, both KKR and Silver Lake purchased the semiconductor unit of Royal Philips Electronics for 3.4 billion euros.
Basically, it looks like the semiconductor industry is poised for strong growth. After all, with the growth in things like iPods and cell phones, there is a need for semiconductors.
As for Freescale, it had revenues of about $5.8 billion for the past year. Also, it has big-time customers like Motorola, Cisco, Ford, and General Motors.
Of course, for investors, it will be tough to make money on Freescale, as the stock price soared on the news. True, there may be outside bidders. But, for the most part, private equity firms do not like to get into a bidding frenzy – at least not so far.
Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.
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