Amsterdam, The Netherlands and London, England:
Upon Royal Philips Electronics' signing an agreement with the consortium of Kohlberg Kravis Roberts (KKR), Silver Lake Partners, and AlpInvest Partners, the consortium will acquire an 80.1% stake in Philips' Semiconductors business. Philips will retain a 19.9% share.
The transaction puts the value of Philips' Semiconductors business at approximately €8.3 billion: €3.4 billion purchase price, €4.0 billion for debt and other liabilities, and €0.9 billion for Philips' remaining stake. Philips estimates it will receive cash proceeds after tax and transaction related costs of about €6.4 billion. The transaction is expected to conclude in the fourth quarter of 2006. Renaming of the new company will be announced later this year.
The consortium is experienced in technology-related business transactions, as evidenced in the buyouts of SunGard Data Systems in the U.S. and Avago Technologies in Singapore.
Commenting on the transaction, Johannes Huth, a Member of KKR says that "We are very pleased to be making this investment and are excited about the opportunity to work with the company's outstanding management team. With the support of the consortium and Philips as an investor, the company will continue to innovate in order to provide its customers with leading-edge solutions and products that drive growth."