Semiconductor Value Chain

KKR Reveals 6.8% Stake in Marvell

01 January 2014

Private equity company Kohlberg Kravis and Roberts (KKR) has revealed that it has built up a 6.85 percent equity stake in fabless chip company Marvell Technology Group Ltd. in a regulatory filing with the Securities & Exchange Commission.

Marvell was co-founded by Sehat Sutardja and his wife Weili Dai in 1995, who serve the company as CEO and president, respectively. It has built up positions in ICs for disk drives and communications.

KKR also said the firm may engage in discussions with the board and the company's management that may include a merger or reorganization, according to a Reuters report.

KKR is known in the semiconductor industry for being one of a set of private equity companies that teamed up in 2006 to buy an 80 percent stake in Philips Semiconductors for €6.4 billion (about $8 billion) as part of the process of creating NXP as a spin-out chip company. Also as part of that process NXP (Eindhoven, The Netherlands) was saddled with the money used for the buy out as debt.

In 2009 KKR wrote down the value of its holding in KKR's holding in NXP to 10 percent of what it had been at the time of the acquisition. KKR and the other members of the consortium have since then been winding down their position in NXP, which still has total gross debt of about $3.7 billion and net debt of $2.75 billion on its books.

In the third quarter of its financial year ended Nov. 2, 2013, Marvell made a net income of $103 million on sales revenue of $931 million. The results were above the high-end of guidance.

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