Freescale looks to raise $1billion to pay down debt
When private equity investors acquired NXP and Freescale a few years ago, the cost of the deals was placed on the acquired company's balance sheet. In that way, NXP and Freescale paid for the privilege of being bought.
This approach worked in good times; unfortunately, the timing of the deals was bad.
When the global economy collapsed shortly afterwards, the debts came close to finishing both companies.
Now Freescale is launching an IPO, with the aim of raising $1billion to pay down debt. That's good for Freescale, certainly. But it's also good for the semiconductor industry as it shows that investors are back in action. Because, for a couple of years, investing in semiconductor companies has been as attractive as assuming toxic banking debts.
