Silver Lake has made its maiden investment in China with the acquisition of a 13 percent minority stake in NASDAQ-listed technology company Spreadtrum Communications. The investment was worth $40 million.
Founded in April 2001, Spreadtrum is a fabless semiconductor company which develops chips and customised wireless solutions for various markets. It listed on Nasdaq in 2007 with a share price of $14 per share, raising $124 million. Silver Lake’s investment makes it one of the largest shareholders in the company, according to a statement from the firm.
Silver Lake is not Spreadtrum’s first private equity investor. The company, which operated at a net loss of $19.3 million in 2009, saw a $22 million investment from Baltimore-based venture capital firm New Enterprise Associates in 2004 for an undisclosed stake.
Technology giant Silver Lake first attempted to break into the Chinese market in 2008 when it and Bain Capital reached the final round of a bidding war for a controlling stake in Huawei Technologies’ mobile product unit. The sale, which according to media reports would have been valued at around $2 billion, was ultimately called off by Huawei in light of the economic downturn.
Silver Lake closed its third buyout fund in March 2008 on $9.3 billion, slightly below its target of $10 billion but more than double the size of its predecessor vehicle. The firm’s mid-market investment arm, Silver Lake Sumeru, closed its inaugural fund on $1.1 billion in May 2008 after roughly 11 months in the market.
The firm employs more than 90 professionals worldwide and manages over $14 billion across large cap and mid market private investment strategies. In Asia, it has offices in Hong Kong and Tokyo.