KKR in $1.6bn electronics deal

The firm is increasing its stake in components maker Yageo, in which it already owns a 16% stake.

Private equity group Kohlberg Kravis Roberts has joined Pierre Chen, founder, chairman and chief executive of Taiwan's Yageo Corporation, in launching a tender offer to acquire 100 percent of the outstanding common shares of the company.

The transaction values the electronics company at around TWD47 billion (€1.1 billion; $1.6 billion), according to a statement. The offer price of TWD16.1 per share represents a premium of approximately 14 percent over the closing price of Yageo shares on the Taiwan Stock Exchange as of 1 April, and is equal to the highest closing price the stock has reached since July 2004.

The transaction follows KKR’s $230 million investment in Yageo in 2007, which gave it a roughly 16 percent stake in the provider of passive-component services.

Upon completion of the tender offer, Chen and his family will control 55 percent of the company, according to a statement from Chen.

Established in 1977, Yageo has a product portfolio of resistors, ceramic capacitors, ferrites, high frequency products, aluminum capacitors, inductors and others in both commodity and specialty versions. The company has production and sales facilities in Asia, Europe and Americas.

“From a long-term perspective, the new shareholding structure will enable investments in accelerated high end product development and deeper penetration into western markets, which will complete our transformation into a global leader across our focus products,” Chen said in the statement.