If anyone wants to buy a second hand chipmaker, Freescale has indicated that it might be selling itself off.
According to the New York Post, Freescale has hired investment bankers to explore a possible sale, and it has an unnamed buyer in mind.
It is pretty likely to be Samsung as this has been rumoured for a while. Freescale makes chips used in automobiles, consumer products, telecommunications infrastructure and industrial equipment and this is an area Samsung wants to expand into. Samsung Electronics has $63 billion in cash which could be spent on acquisitions,
Of course no one is saying anything at the moment and it is unlikely to be confirmed for a while.
Freescale went public in 2011 after being taken private in 2006 for $17.6 billion in a leveraged buyout by a group of private equity firms that included Blackstone, Carlyle and TPG Capital.
On January 27, the company reported strong results for the fourth quarter — with revenue up 11 percent and increased margins — as well as a forecast for the current quarter that exceeded Wall Street expectations. Since then, Freescale shares have jumped 32 percent.
Walkie-talkie and radio systems maker Motorola Solutions is looking into a possible sale.
According to Bloomberg, potential buyers could include private equity firms and defence contractors including Raytheon, Honeywell and General Dynamics.
The 87-year-old company is working with financial advisers as it looks for a buyer.
We are not holding our breath. The sale process has been going on for several months, and a deal isn’t on the immediate horizon.
Motorola was split up four years ago into Motorola Solutions and a handset unit after a campaign by billionaire Carl Icahn. The handset business was sold to Google which then sold most of it to Lenovo.
Things are not going that well for Motorola Solutions. It has poor earnings performance, with 2014 earnings dropping 33 percent as sales declined six percent. The outlook for this year remains stagnant — the company projects 2015 revenue will be flat to slightly lower.
In other words, Motorola probably should not have listened to Icahn. Lenovo is doing well with the bits of the company it bought and saw its bottom line grow because of its investment.