Burlingame, Calif. – Freescale Semiconductor, the world’s 10th largest chipmaker, has agreed to sell itself for $17.6 billion in cash, or $40 a share, to a group of privately held buyout firms led by The Blackstone Group.
The acquisition price is a 7.6% premium to Friday’s closing price of $37.16 and a 30% premium to the price last week before talk of a possible deal began to spread. Blackstone was joined by The Carlyle Group, Permira Funds and Texas Pacific Group.
This deal represents yet another private equity takeover of a top ten chip company. Last month, a group led by Kohlberg Kravis Roberts and Silver Lake Partners snapped up 80% of Philips Semiconductors for $10.5 billion. (See “Why Private Money Likes Chips.“)
KKR and Silver Lake were also reportedly bidding on Freescale (nyse: FSL – news – people ). The company said in a statement that it may continue to solicit bids for the next 50 days, but that if it doesn’t complete the Blackstone deal it would be forced to pay an undisclosed break-up fee.
The Austin, Texas-based company makes chips used in a wide array of products, from cell phones to automobiles to networking gear. With chip sales last year of $5.6 billion, it ranked as the 10th largest semiconductor company, one behind Philips Semi, according to iSuppli.
The board unanimously approved the deal. Shareholders still must approve the transaction, as must regulatory agencies.
Forbes.com, Chris Kraeuter