Company attributes
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Freescale Semiconductor Ltd. specialized in the development of embedded processing solutions, including embedded processors, complementary semiconductor devices, and software. The company was centered around five main product groups:
- Microcontrollers
- Digital networking
- Automotive microcontrollers (MCUs)
- Analog and sensor
- Radio frequency (RF)
Freescale's key applications and end-markets included automotive safety, hybrid and all-electric vehicles, next generation wireless infrastructure, smart energy management, portable medical devices, consumer appliances, and smart mobile devices.
In 2005, the company had 24,000 employees worldwide, chip sales of $5.84B, and a profit of $584M. At the time, Freescale had seven semiconductor fabrication plants and two assembly and test facilities.
Freescale Semiconductors was acquired by NXP Semiconductors in 2015. The merged entity took the name of NXP Semiconductors N.V. and went on to focus on the development of automotive solutions and general purpose microcontroller (MCU) products for connectivity, processing, and security applications. Following the merger, the combined revenue of the two companies amounted to over $10 billion.
Under the terms of the agreement, Freescale shareholders have received $6.25 in cash and 0.3521 of an NXP ordinary share for every Freescale common share held at the close of the transaction. The purchase price suggested a total equity value for the company of approximately $11.8 billion and a total enterprise value of approximately $16.7 billion, including Freescale's net debt.
NXP funded the transaction with $1.0 billion of cash from its balance sheet, $1.0 billion of new debt and approx. 115 million NXP ordinary shares. Following the transaction, Freescale shareholders held approximately 32 percent of the combined company. The agreement has been unanimously approved by the boards of directors of both parties and also necessitated regulatory approvals in various jurisdictions and customary closing conditions, as well as the approval of NXP and Freescale shareholders.
In 2006, Freescale accepted a $17.6 billion offer from several private equity firms led by the Blackstone Group to buy the company, which had been at the time the largest-ever buyout of a technology company. As part of the deal, Freescale reserved the right to continue soliciting bids from other investors for fifty days from the date of the transaction. Freescale's board of directors gave unanimous approval; however, the deal had to also be approved by Freescale's shareholders and regulatory agencies.
Other terms included the payment of a $300 million fee in the event that Freescale's shareholders back out of the agreement. The consortium was led the Blackstone Group and included the Carlyle Group, Permira Funds, and Texas Pacific Group. Under the transaction's terms, the consortium acquired all of the outstanding Class A and Class B shares of Freescale for $40 per share in cash – 36% more than their average closing price in the 30 days ended Sept. 8, 2006.
