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Singapore's UTAC marked for private equity bid

Posted: 29 Jun 2007 ?? ?Print Version ?Bookmark and Share

Keywords:private equity? test and assembly? takeover bid?

Affinity Global Capital and TPG Capital launched a takeover bid for Singapore's United Test and Assembly Center Ltd (UTAC), in yet another indication of private equity's growing interest in the semiconductor industry.

The three companies said in a statement that a special-purpose vehicle established by the private equity partners, Global A&T Electronics Ltd, would pay 78 cents in cash for each UTAC share, a price that values the firm at around $1.4 billion. The offer represents a premium of over 30 percent on the company's average share price over the last six months. UTAC shares soared on the Singapore Exchange on news of the bid.

The deal will require the approval of at least 75 percent of UTAC's shareholders to go ahead. Affinity and TPG said they had already secured the support of shareholders controlling over 17 percent of the assembly house.

If successful the buyers will delist UTAC from the Singapore exchange, but Affinity and TPG are "fully committed to UTAC continuing to honor all its commitment to its customers and business partners as usual," said Asish Shastry, Southeast Asia managing director for TPG.

Shastry said the partners' track record in the industry meant they were "well positioned to commit additional resources, network and expertise to UTAC's team to help bring the company to the next level."

"We have a high regard for the track record of UTAC and its current management team. A key objective for us is to retain the team after the close of offer," added Affinity managing partner David Lai.

UTAC has seen revenues soar in recent years, with profits jumping over 80 percent in 2006 to $76.2 million. But many observers saw it as a likely takeover target due to its relatively small size.

The move to scoop up UTAC comes soon after the investment arm of the Singapore government, Temasek Holdings, failed to drum up sufficient shareholder support for its attempt to take packaging firm STATS ChipPAC private.

Taiwan rival Advanced Semiconductor Engineering Inc. (ASE) recently scrapped plans to go private.

- Jonathan Hopfner
EE Times

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