MADISON, Wis. -- Private equity firm KKR & Co. LLP has amassed a 6.8 percent stake in Marvell Technology Group, according to a regulatory filing.
While KKR’s investment in Marvell was first reported by Bloomberg News early November, the transaction only became public after market close on Monday, through KKR’s filing with the Securities and Exchange Commission.
What remains unclear, however, is KKR’s motive in acquiring a stake in Marvell. It’s not known if and when any conversation or negotiation took place prior to the transaction, between KKR and Marvell’s co-founders Chief Executive Officer Sehat Sutardja and his brother Pantas. The Sutardja brothers reportedly own more than 20 percent of the company.
Marvell is keeping mum on KKR’s investment in the company. Marvell’s spokesman Sukhi Nagesh told EE Times that as a matter of policy, Marvell does not comment on investments or market activities of any of the company’s investors.
However, speculation abounds, including the scenario that KKR might be considering a leveraged buyout of Marvell, or that KKR might be planning the merger or reorganization of Marvell’s business.
As to the purpose of transaction, KKR wrote in the SEC filing that KKR “acquired beneficial ownership of the securities reported herein for investment purposes and intend to review their investments in the Issuer on a continuing basis.”
This boilerplate statement is nothing to write home about, but KKR added in the filing that the firm “may engage in discussions with management, the board of directors, stockholders of the Issuer and other relevant parties or take other actions concerning any extraordinary corporate transaction (including but not limited to a merger, reorganization or liquidation) or the business, operations, assets, strategy, future plans, prospects, corporate structure, board composition, management, capitalization, dividend policy, charter, bylaws, corporate documents, agreements, de-listing or de-registration of the Issuer.”
This addition leaves the door open for KKR to take more of an activist role in Marvell’s future operations.
Marvell is currently involved in a large US patent dispute with Carnegie-Mellon University. A federal jury in Pittsburgh ordered the company in December, 2012, to pay a $1.17 billion award for infringing Carnegie-Mellon patents covering hard disk drive integrated circuits. Marvell failed to overturn the jury verdict in September, 2013, but it has pledged to appeal the decision to the U.S. Court of Appeals for the Federal Circuit.