NXP Semiconductors has agreed to divest its Standard Products business to a consortium of financial investors consisting of Beijing Jianguang Asset Management (JAC Capital) and Wise Road Capital. Under the terms of the agreement, the consortium will pay around USD 2.75 billion for the business. The transaction is expected to close in the first quarter of 2017, pending regulatory approvals and employee representative consultations.
The NXP Standard Products business supplies Discrete, Logic and PowerMOS semiconductors focused on the Automotive, Industrial, Computing, Consumer, and Wearable application markets. At the close of the transaction, the NXP Standard Products business will be branded Nexperia, which will be headquartered in Nijmegen, the Netherlands. The NXP Standard Products business reported annual revenues of USD 1.2 billion for fiscal 2015.
According to NXP CEO Rick Clemmer, the transaction enables NXP to continue to focus on its High-Performance Mixed Signal business, expanding its Secure Connections for a Smarter World strategy. JAC Capital said it will continue to support the existing labour conditions for the Standard Product employees. Wise Road Capital plans to provide Nexperia the capital it requires to accelerate its global growth strategy. Although servicing a variety of markets, Nexperia will be especially increasing focus on automotive applications.
Under the agreement, the entire scope of the NXP Standard Products business, including its management team, led by Frans Scheper, and approximately 11,000 NXP employees will be transferred to Nexperia. Nexperia will be an independent company incorporated in the Netherlands, and will be fully owned byJAC Capital and Wise Road Capital, following the completion of the transaction.
Additionally, NXP’s Standard Product front end wafer fabs in Manchester, UK, and Hamburg, Germany, and the back-end facilities in Guangdong, China, Seremban, Malaysia, and Cabuyao, Philippines, will be transferred to Nexperia, as well as the in-house equipment manufacturer ITEC and all relevant patents and intellectual property associated with the Standard Products business.
The transaction, including the entry into and the terms of the definitive agreements and the approval of JAC Capital and Wise Road Capital as the acquirers are subject to review and approval by the US Federal Trade Commission, the European Commission, MOFCOM and other agencies. Credit Suisse acted as exclusive financial adviser to NXP.
