Acquicor Plucks Jazz Semi As Its First Acquisition

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 |  Includes: AQR, CNXT-RETIRED
by: Eric Savitz

Remember Acquicor Technology (AQR)? It’s the blind pool, er, “special purpose acquisition company,” that raised $172.5 million earlier this year with nothing to offer other than the services of a trio of former Apple executives, including Steve Wozniak, Gil Amelio and Ellen Hancock.

Well, Acquicor has found a company to buy: it’s Jazz Semiconductor, a Newport Beach, California-based contract fab. The company was created in 2002 by Carlyle Group, which helped carve Jazz out of Conexant Systems (NASDAQ:CNXT-RETIRED).

Acquicor will pay $260 million for Jazz, including $164.3 million in IPO proceeds, plus $65 million in borrowings from third parties and up to $80 million in seller financing; you’ll notice the numbers don’t add, which reflects the fact that the deal will also provide some operating cash to Jazz.

The announcement of the deal says that Gilbert Amelio will remain Chairman and CEO of Acquicor; Ellen Hancock will be Chief Operating Officer and Steve Wozniak will be Chief Technology Officer. Shu Li, the current president and CEO of Jazz, will continue in that role. (Just why the company needs two CEOs isn’t exactly clear.)

Jazz has withdrawn an IPO registration filed earlier this year with the SEC.

The company’s customers include Skyworks Solutions, Conexant, Marvell Technology, RF Micro Devices, Freescale Semiconductor, Airoha Technology, Xceive and Mindspeed Technologies.

According to the IPO filing, the company had revenue in 2005 of $199 million, down from $219.5 million in 2004. The company lost $11.5 million from operations in 2005, or $25.7 million after preferred dividend payments. Jazz also lost money in 2003 and 2004.

In after-hours trading, Acquicor shares on Tuesday rose 40 cents to $5.90.

Conexant, which owned a 42% stake in Jazz, will get $100 million from the sale. Conexant shares rose 13 cents to $2.05 in after hours trading.