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Freescale files for $1.15 billion IPO

2/11/2011 08:25 PM EST
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subman
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re: Freescale files for $1.15 billion IPO
subman   2/11/2011 9:39:15 PM
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What % are they offering for 1.15B...i.e. what are they valuing the company at? Kind of an important data point missing from the article here.

mcgrathdylan
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re: Freescale files for $1.15 billion IPO
mcgrathdylan   2/12/2011 12:01:49 AM
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@subman- this information is not contained in the S-1. Freescale disclosed the proposed maximum aggregate offering price ($1.15 billion) and the amount of registration fee ($133,515), but did not say how many shares it would offer, the proposed price of the shares or the percentage of the company that is being offered for sale. Presumably these details are to come.

AlunWang
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re: Freescale files for $1.15 billion IPO
AlunWang   2/12/2011 2:48:14 AM
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Only 1.15B, I am a little curious how they value a company?

Ash
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re: Freescale files for $1.15 billion IPO
Ash   2/12/2011 5:39:03 AM
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They made $1 B in loss. Private equity companies want out and hence the IPO. They have been making a loss since 2007. The company got in serious trouble after private equity purchased them.

Tunrayo
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re: Freescale files for $1.15 billion IPO
Tunrayo   2/14/2011 10:33:49 AM
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Private equity and LBO activities can sometimes wreck the balance sheets of companies. There is need for more government regulation in this regard. Now the company hopes to transfer toxic assets to unsophisticated investors in their IPO.

wave.forest
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re: Freescale files for $1.15 billion IPO
wave.forest   2/12/2011 3:39:10 PM
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Only $1.5B for a compamny with ~$4.5B sales? The article seems not giving a clear explanation. Somehow, I have difficult to unserstand the writing: "sixth straight quarter of revenue growth" and $1B loss? The more they sell, the more they maks loss? What a logic?!

mcgrathdylan
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re: Freescale files for $1.15 billion IPO
mcgrathdylan   2/12/2011 5:50:41 PM
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@wave.forest- Freescale has been on a roll in terms of growing revenue, but the debt that the company carries (from the Blackstone acquisition) still hinders the company. Little by little Freescale pays off/amortizes this debt. In fact, it appears that the IPO money is going to be used to pay down debt. As for what percentage of the company is up for sale, I'm curious about that myself, but I'm sure that it's not the entire company. Thanks for reading.

wave.forest
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re: Freescale files for $1.15 billion IPO
wave.forest   2/13/2011 1:16:13 PM
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thank you very much for the detailed explanation, thewhiz :) I think you write better than the EETimes.

mcgrathdylan
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re: Freescale files for $1.15 billion IPO
mcgrathdylan   2/13/2011 5:57:49 PM
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For the record, I am "thewhiz."

wave.forest
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re: Freescale files for $1.15 billion IPO
wave.forest   2/13/2011 10:32:29 PM
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hahaha ... Next time, you need to write it clearer. It read very misleading.

wilber_xbox
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re: Freescale files for $1.15 billion IPO
wilber_xbox   2/18/2011 1:10:32 AM
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why 1.5B only, if they want to pay the debt then they should raise more money. There is some strategy that Freescale is following and that is missing in this article.

eewiz
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re: Freescale files for $1.15 billion IPO
eewiz   2/12/2011 4:27:16 PM
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I guess 1.15B is only for a small portion of the company. Normally companies release ~5-20% stock when they for an IPO. Based on that the valuation could be around 5-20B.

daleste
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re: Freescale files for $1.15 billion IPO
daleste   2/12/2011 5:27:49 PM
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It's good to see Freescale going public. They do have a lot of debt from the buyout. It will take years to repay.

yalanand
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re: Freescale files for $1.15 billion IPO
yalanand   2/13/2011 4:21:07 PM
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I guess this is good time for any company to take IPO route. Markets are slowly picking up and am sure Freescale will find enough buyers. But I still don't understand why did it got unlisted back in 2006 ?

daleste
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re: Freescale files for $1.15 billion IPO
daleste   2/13/2011 7:26:53 PM
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They didn't get delisted. They went private when they spun out from Motorola.

Tunrayo
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re: Freescale files for $1.15 billion IPO
Tunrayo   2/14/2011 11:05:31 AM
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I feel Freescale has been encouraged by the recent growth of NXP's stocks on the market. They are probably hoping to replicate the same success. I don't know how much of the company they are offering. Regardless, Freescale balance sheet looks pretty stinky. They have about $7.5b of debt but just over $4b in total assets (thus stockholders' equity is negative). They just paid about $950m in 2010 in interest and principal loan repayments. I don't know what they will do with the IPO money, but my guess is they will use it to pay off part of the $7.5b debt (the $1.5b will just go into the approx negative $5b equity blackhole). If they do, the debt goes down, but I estimate about $700m will still go down the drain as interest and loan payments in 2011. Freescale could be a successful company - barring the huge debt on their books. They are growing their sales and the gross margin is good. The private equity buyout destroyed the balance sheet of an otherwise healthy company.

old account Frank Eory
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re: Freescale files for $1.15 billion IPO
old account Frank Eory   2/18/2011 3:18:26 AM
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yalanand & daleste, you guys are missing an important detail regarding Freescale's history: Freescale went public, not private, when it was spun out from Motorola. The first IPO was in 2004, at $13/share on the NYSE. Two years later, a consortium of private equity companies bought the company for $40/share in a leveraged buyout. The upcoming IPO will be the second time the company has gone public.

KB3001
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re: Freescale files for $1.15 billion IPO
KB3001   2/13/2011 10:05:50 PM
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Clearly the owners want out, but we do not known the price at which they are valueing the company. Anybody knows?

BalaLak
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re: Freescale files for $1.15 billion IPO
BalaLak   2/14/2011 4:36:41 AM
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Read the S-1 here: http://www.sec.gov/Archives/edgar/data/1392522/000119312511032381/0001193125-11-032381-index.htm The S-1 is grossly incomplete and it says: "The information contained in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted. Subject to Completion, Dated February 11, 2011"

Semislave
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re: Freescale files for $1.15 billion IPO
Semislave   2/14/2011 5:12:07 PM
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Does it include a Cashflow statement? Would love to see that.

mcgrathdylan
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re: Freescale files for $1.15 billion IPO
mcgrathdylan   2/14/2011 5:55:23 PM
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You can find the Freescale S-1 here: http://www.sec.gov/Archives/edgar/data/1392522/000119312511032381/ds1.htm

cbbear
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re: Freescale files for $1.15 billion IPO
cbbear   2/24/2011 12:05:55 PM
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Some of the comments here seem to assume that the owners want to sell it because of the losses/debt. Actually, it is the opposite: Blackstone bought Freescale shares at $40, then put the debt of the buyout on Freescale itself. The company has been paying the debt of its own buyout back to Blackstone, therefore the red numbers, despite of being operationally profitable. Now Blackstone will make even more money by selling its shares (1.5B just part of it, how much not disclosed). These guys are smart, aren't they?

Carlos.Rodriguez_#1
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re: Freescale files for $1.15 billion IPO
Carlos.Rodriguez_#1   4/5/2011 11:25:56 AM
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My guess is that Blackstone wants to test the market for an eventual sale of FSC, maybe Intel will want to buy it considering they haven't been succesful in the evergrowing embedded market, and considering the Mobile/Embedded market is filled with rocket fuel vs the PC market. Will chip makers split among the different mobile ecosystems? Sooner or later they will... and will then know who will buy FSC.

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