Freescale Semiconductor Buyout? 67
Alchemist253 writes "The New York Times is running an article about a possible leveraged buyout of speciality chipmaker Freescale Semiconductor. Freescale currently makes a variety of embedded processors, microcontrollers, and memory, but is probably best known to the Slashdot crowd as the Motorola spinoff that supplied Apple its PowerPC chips before the shift over to an Intel architecture. From the article, "A consortium of investment firms was near a deal late last night to acquire Freescale Semiconductor... for more than $16 billion, according to people briefed on the negotiations. The deal, if completed, would be the largest leveraged buyout ever in the technology sector, surpassing the $11.3 billion sale of SunGard Data Systems last year.""
Leveraged Buyout (Score:2)
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Borrow Money to Buyout a Company (Score:3, Interesting)
From the Wikipedia entry on it [wikipedia.org]:
So, they're essentially borrowing money to buy them out. What does this mean? Well, perhaps the people buying them out think they can pay that debt off quickly or they have a lot of money in the bank and qualified for th
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If you want to figure that one out, start checking what CPU your router is using, or your car, or a gazillion of those things nowadays that happen to use a CPU even if it doesn't boot in a GUI OS nor is used plugged to keyboard and monitor.
Re:Borrow Money to Buyout a Company (Score:4, Insightful)
2) Again typically, the plan is to sell off unproductive parts of the company, cut costs, or increase value with some other short-term plan.
3) If there were some obvious decline facing Freescale, it would already be priced into the stock.
4) As someone else has pointed out, this is a huge company that isn't a familiar name only because it doesn't make branded consumer products.
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* Motorola cell phones
* Sony electronics
* Whirlpool appliances
* Logitech keyboards and mice
* Lifefitness cardiovascular and strength training equipment
* Cisco routers
* Bose Acoustic Wave radios
* Trane heating and cooling equipment
* Mercedes, BMW, Ford, Hyundai and General Motors vehicles
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1. Borrow money
2. Buy Company
3. ???
4. Sell Company at a profit
Where ??? is re-organization, layoffs, restructuring, spin-offs, etc.
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While I'm sure Apple is a nice customer to have, I can't imagine that their business would have been more than a tiny fraction of Freescale's business. Also, apple was not buying all their processors from Freescale - the G5s were from IBM.
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Thousands of companies use Freescale parts. For example, Cisco has many service modules that use them, as do Cisco's competitors. Mostly these companies buy a PowerPC with a bunch of other stuff integrated into it, like GigE MACs,
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When you buy something so big you need a crowbar to get it out the door.
Actually it's when you don't have enough funds on hand to buy a company, so you borrow funds (money, stock) with the to-be-bought company as collateral, use it to buy the place, then, often, extract value from your newly bought company to pay back the loan. The name comes from using a loan as leverage to make a deal you couldn't have pulled off otherwise.
Re:Leveraged Buyout (Score:4, Insightful)
It's particularly silly in this case, as Motorola/Freescale has been often held up (perhaps even partially correctly) as an example of really good management. It's hard to stay in business for 50+ years with bad management.
The ideal case would be where the company *is* being run by clueless types. Or managers that emphasize long-term results versus quick cashouts. In those cases the blabby idiotsd can run the company into the ground and get lots of cash for a few years at least until all the cash cows have been milked dry.
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Motorola/Freescale held up as an example of good management? Maybe other divisions of Motorola, but even then I'm not so sure. [businessweek.com] As I recall, what became Freescale almost never made a profit when it was Motorola Semiconductor, and just ended up being a training ground for other companies. [eetimes.com] MSPS just liked to bleed money. [yeald.com] That was true even before the tech bubble burst.
I won't comment on Freescale as my employer competes directly with them. I don't mind commenting on old news though.
--Joe
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Clarification: I won't comment on Freescale post spin-off. Obviously I commented on MSPS, which is what became Freescale.
--JoeRe: (Score:1)
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The current Freescale, unhindered by Motorola, may indeed be much more competitive than when it was MSPS. I was objecting more to the comment that Motorola was such a shining example of great management.
--JoeRe: (Score:1)
'Buy' link (Score:1, Funny)
TFP is WRONG (Score:4, Informative)
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This has reasons. The decision which processor to use is made by technicians who know what they are doing virtually everywhere but at the desktop. But the vast majority of desktop decisions are made by corporate managers, that are bought by Microsoft or don't know anything else, which means the have to use x86 for (backwards) compatibility
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Windows NT ran fine on PowerPC, Alpha, and (I believe) MIPS. The problem was the applications. Very few were ever ported to anything else, and most people wanted to run legacy DOS applications. If you had an Alpha, you could run x86 applications using DEC's FX32! to emulate it, but that somewhat defeated the point of using a fast chip.
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No. Windows did not run as well as other operating systems did on non x86 platforms. To blame it on the apps is unfair also. Apps drive an OS, not the other way around. Ap
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NT on Alpha was 32 bit (Score:1)
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Microsoft joined the IBM Power PC bandwagon(?) with the Xbox360 and so far I haven't heard people complaining about BSOD or crappy performance. They may be able to pull one right every so often..
I'd rather say that x86 is around because it
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It seems Wiki's enterprise/CPU sections got rid of CPU fanboys,zeaolots (both CISC and RISC) lately and could be trusted for neutral information regarding these stuff.
As a quad G5 owner thanks to Apple move to Intel, like-a-joke non serious claims like "5x faster than G5!" and entire Apple fanboy base becoming Intel fanatics, I felt forced to get all the information which I no
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See, on one side we have the 3 years old Dual Single-Core G5 with 2,5GHz. On the other side we have the newest Dual DualCore Xeon with 2,66GHz. That is 3 years advance in technology and manufactoring process (even a geberation generation difference, the G5 is 90nm and the Xeon is 65nm), double the cores cores and a neglectable 1% advantage in Clock. Yet the speed advanatge barely scratches 50% in i
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x86 is big in in servers and has a near total lock in notebooks as well. PowerPC and Power are NOT the same. PowerPC is strong in embedded and that's it. Power is strong in servers but that doesn't count.
"The only reason that x86 is still around is, that it is the only architecture Microsoft ever got their operating systems working on
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No one with a brain would ever say that even the best X86 cpu is better than a Power5 or the latest UltraSparc. Just as nobody with a brain would use an X86 is a better solution for a low power embedded system than an PPC, MIPS, or ARM mpu.
However the X86 does have some pluses. It is often just the right size. Many servers companies don'
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Just as x86 isn't used anywhere in any significant amounts but on the desktop.
I'd hardly call x86's server and embedded presence insignificant. It doesn't dominate quite as utterly as it does on the desktop, but it's certainly existing in other niches. I've seen x86 DVD players(Toshiba's initial Blueray player was a pretty bog-standard P4 running linux from a built in USB key.), set top boxes, phone systems, kiosks, ATMs, you name it.
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No it doesn't. Power and PowerPC are not the same. PowerPC is strong in embedded but has little presence outside that.
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Note that the post I commented on referred to PowerPC in the server room. It has never had presence there with the minor exception of the recent IBM G5 blades.
"Note this is distinct from POWER, which was IBM's branding of their architecture for their microprocessors."
IBM makes lots of processors including PowerPC embedded processors and POWER processors for their server line. POWER was the name of ONE of their architectures. POWER and PowerPC are not the same. Appare
The state of PPC (Score:2)
Presumably Freescale still has a decent share of the embedded market, but their position in general computing can be summed up in 8 characters: MPC8641D. Their amazing high-performance dual-core fast-FSB low-wattage super-G4 has been "just around the corner" since mid-2004.
If that chip and the 3GHz G5 had shipped on schedule, the results for http://www.google.com/search?q=boot-camp [google.com] would be a lot different.
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With Intel and AMD rolling out the DRM (Score:1)
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I mean DRM is what industry wants, when industry want something, the vendors implement it via hardware or software. The only "hope" for consumer is to stay away from DRM/TPM based stuff. Well, it doesn't happen
Basic example: iPod has DRM yes? It runs on ARM Arch CPU, which is RISC based. S
Huh? (Score:1)
Hmm (Score:1)
Possibly ungood (Score:5, Informative)
The Wiki article on leveraged buyouts is pretty neutral. You have to read between the lines.
From the Wiki article: "Proponents of LBOs claimed that they caused companies to make more efficient use of their resources." That means that you don't want to be the victim of a leveraged buyout and have to defend yourself against it. If you haven't made efficient use of your resources (ie. your assets are worth more than your stock) you could become the victim of corporate raiders. http://en.wikipedia.org/wiki/Corporate_raid [wikipedia.org] They sell off your assets and your company ceases to exist.
In the nastiest kind of leveraged buyout, the buyers essentially use the company's own money to buy it.
Let's see if Freescale tries to defend itself with a poison pill. http://en.wikipedia.org/wiki/Poison_pill [wikipedia.org]
Geez, this investment stuff is almost as much fun as reading Groklaw.
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No way, Unless .... (Score:2)
I like the freescale people we have and I like the direction its moving. Be a real shame to have to cut back to appease the new masters.
Involuntary LBO or attempt to go private? (Score:2)
Is this welcome by Freescale as an attempt to go private? Or, is this an attempt to forcibly take over the company by a different group of managers or (as a previous post questioned) corporate raiders?
Going private isn't necessarily bad. That can have some advantages for the company. Especially if this is voluntary and would essentially leave day-to-day operations and management unchanged (assuming the groups are succesful). Board of directors might change dramatically, and some t
Official press release from Freescale (Score:1)
Freescale Semiconductor in Discussions
AUSTIN, Texas, Sep 11, 2006 (BUSINESS WIRE) -- Freescale Semiconductor, Inc. (NYSE:FSL) (NYSE:FSL.B), a global leader in the design and manufacture of embedded semiconductors for wireless, networking, automotive, consumer and industrial markets, said today that it is in discussions with parties relating to a possible business transaction.
There can be no assurances that any transaction will result from these discussions.
To protect the interests of its stockholders,
Semiconductor buyouts (Score:1)
There are not many integrate
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Ummm. . . . (Score:1)
Didn't they abandon the PowerPC (G3 and G4) line of CPU's in favor of IBM's G5 chips before switching to Intel (at least in the desktop world)?
-Scott