initial public offerings (IPOs) trading on American exchanges

Thursday, May 26, 2011

Freescale Semiconductor launches IPO, misses $1B target

Austin-based chipmaker Freescale Semiconductor Inc. went public on Wednesday but fell short of company expectations, pricing stock 22% less than projected at $18 a share.
According to an initial public offering filing (IPO), Freescale wanted to raise more than $1 billion, which is around $22 to $24 a share but instead will settle on making approximately $782 million after the sale of 43.5 million shares, excluding an underwriters’ option to purchase as many as 6.5 million shares.
Freescale stated that proceeds from the sale will almost exclusively be used to pay off some of its $7.6 billion in debt. The company has shares available on the New York Stock Exchange (NYSE) under FSL and opened to the public today on a positive note at $19 a share.
This is the second time Freescale has gone public. The firm offered up shares in 2004, after breaking with Motorola Inc., and raised $1.6 billion from that IPO. In 2006, it was bought out for $17.6 billion, or about $36.12 per share after a private buyout by the Blackstone Group, the Carlyle Group, Permira Advisors, and TPG Capital.
One major bonus of reducing debt is that  interest expense will also go down by about $60 million a year. Freescale paid approximately $583 million in interest in 2010. The firm had around $4.5 billion in sales last year.
Freescale has about 5,000 employees in Austin and close to 19,000 total worldwide.

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