NXP raises $476m in IPO

NXP Semiconductors, backed by firms including KKR and Bain Capital, priced below its original target, selling shares at $14 a piece.

NXP Semiconductors has raised $476 million in its initial public offering of 34 million new shares, priced at $14 each, well below the target amount of $1.15 billion the company set in April.

The company, backed by Kohlberg Kravis Roberts, Bain Capital, Silver Lake Partners, AlpInvest and Apax, cut the amount  it expected to raise in the IPO in July to $714 million, with shares prices somewhere in the range of $18 to $21 each. The private equity group will retain an about 69 percent stake in the company.

The company will use the proceeds to pay down debt. Before the IPO, NXP was carrying a debt load of $4.2 billion. NXP was able to push maturities back on $1 billion of its debt to 2018.

Using IPO proceeds, NXP will be able to reduce annual interest payments by about $28 million, according to Rick Clemmer, NXP’s president and chief executive officer, who spoke during a brief conference call Friday about the IPO. Clemmer declined to take any questions about the IPO.

“None of our original shareholders have sold any of their shares,” Clemmer said.

In July, Moody’s Investors Service upgraded NXP’s credit rating, which reflected the “improving trend of NXP’s business operations amid a recovering semiconductor industry since the second half of 2009 and the positive impact of management’s cost savings measures that are expected to make the company more resilient to the high volatility customary in the semiconductor industry”, Moody’s said in a report.

The private equity group acquired an 80.1 percent stake in NXP from Koninklijke Philips Electronics in 2006 for $10.6 billion, according to an NXP quarterly report.