Freescale Semiconductor Holdings (FSL) is a global leader in embedded processing solutions, which combines complementary semiconductor devices and software for use in controllers, networking and sensors. The Austin, Texas,-based company filed with the SEC on Monday to raise $1 billion by offering 43.5 million shares at a price range of $22 to $24. The deal puts Freescale among five private equity-backed IPO deals that have raised at least $1 billion in proceeds this year, along with HCA Holdings (HCA) ($3.8 billion), Kinder Morgan (KMI) ($2.9 billion), Nielsen Holdings (NLSN) ($1.6 billion) and Arcos Dorados (ARCO) ($7.2 billion).
Freescale's products and services are used in automotive safety, hybrid and all-electric vehicles, wireless infrastructure, smart energy, portable medical devices, consumer appliances and mobile devices. It booked $1.1 billion in adjusted EBITDA on $4.5 billion in sales in 2010, a 27% increase on $3.5 billion in revenues in 2009. The company was divested from Motorola in 2003 and then acquired by an investor consortium including Blackstone (BX), Carlyle Group and TPG Capital in 2006 for $17.6 billion, making it the largest private technology buyout to date.
The last major semiconductor LBO to go public was NXP Semiconductors (NXPI). NXP went public in August 2010, offering 34 million shares at a price of $14, well below the initial range of $18 to $21. Despite initial doubts about the levered balance sheet and performance of comparable private equity-backed deals, NXP currently trades 120% above its listed price partly due to strong sales in its mobile, lighting and automobile end markets.
Other notable private equity-backed companies planning to come to market include Toys "R" Us (TOYS), Party City (PRTY) and Dunkin' Brands (DNKN). Of the 59 IPOs completed this year, 14 have been private equity-backed. These deals raised over $12 billion (64% of total U.S. IPO proceeds) and earned investors an average return of 13%.
Freescale plans to list on the New York Stock Exchange under the symbol FSL. Citi (C) and Deutsche Bank Securities (DB) are the lead underwriters on the deal, which is expected to price during the week of May 23rd.