KKR Said to Plan IPO for NXP in Year’s Biggest Deal

March 27 (Bloomberg) -- NXP BV, the Dutch chipmaker bought by KKR & Co. four years ago, plans to raise at least $1 billion to cut debt in what could be this year’s largest initial public offering, two people with knowledge of the matter said.

NXP hired Morgan Stanley, Barclays Plc, Credit Suisse Group AG, Deutsche Bank AG and Goldman Sachs Group Inc. to run the stock sale, according to the people, who asked not to be identified because the talks are private. KKR, Silver Lake, AlpInvest Partners NV, Bain Capital and Apax Partners acquired an 80.1 percent stake in the firm from Royal Philips Electronics NV in 2006, in a multistage deal valuing the company at 8.3 billion euros ($11.1 billion), including debt. KKR said in December its NXP investment was worth 30 cents on the dollar.

Kristi Huller, a KKR spokeswoman in New York, declined to comment on the potential IPO. Spokesmen for the five banks also declined to comment. NXP spokeswoman Lieke de Jong-Tops said in a text message the company declined to comment because it doesn’t react to rumor and speculation.

Buyout shops have been trying to take companies public, using the proceeds to pay down debt. The group of sponsors borrowed $4.5 billion to fund the takeover four years ago. The semiconductor company’s debt rose to $6.4 billion by the start of 2009. NXP cut that by $1.3 billion through bond exchanges, buy-backs and “privately negotiated” deals last year, the company said this month.

At $1 billion, NXP would be the biggest announced offering this year. Earlier this month, Bain Capital LLC’s Sensata Technologies Holding NV completed the largest U.S. IPO of 2010, selling $569 million of shares at the low end of its expected price range.

NXP’s owners aren’t planning to also run a prospective auction for the company, said the people with knowledge of the matter, in part because Philips intends to keep its stake of about 20 percent. That would complicate a sale to any firm competing with the Dutch lighting company.

NXP, with 29,000 employees, makes computer chips for customers such as Nokia Oyj, Continental AG and Robert Bosch GmbH, according to its Web site. The Eindhoven, Netherlands- based firm’s revenue dropped to $3.8 billion in 2009 from $5.4 billion the previous year.