Freescale Debt Dampens IPO
A quartet of private-equity firms made a splash in 2006 with a $17.6 billion buyout of Freescale Semiconductor Inc. On Thursday, the four firms found the value of their trophy investment had shrunk by half.
To finance the buyout, Blackstone Group LP, Carlyle Group, Permira and TPG Capital plunked down $7 billion of their own money and borrowed the rest. Freescale returned to the public markets Thursday at an initial offering price of $18 a share, which its bankers cut from an expected range of $22 to $24.
Freescale’s shares rose 1.8 percent to $18.33 on their first trading day, valuing the roughly 82.5 percent stake still held by the private-equity firms at just $3.8 billion. But if heavily indebted Freescale performs well, their investment could still turn into a winner.