Report: PE firm Advantage wins Sanyo chip biz sale

September 24, 2007 – Private equity firm Advantage Partners LLP reportedly is the winner in the auction for Sanyo Electric Co.’s chipmaking operations, outbidding and outlasting up to six other potential suitors, according to various media reports.

Earlier this month Japanese press reported that Advantage had the inside track in the sale, swooping in with a 120-130B yen offer to outbid Longreach Group’s 110B yen proposal. Reuters recently reported that a consortium led by the Blackstone Group, which led last fall’s blockbuster buyout of Freescale Semiconductor, had folded its tents, deciding the proposals for Sanyo’s chip business were too high.

The Wall Street Journal reported that up to six bidders could potentially drive the price up to 100 billion yen (~US $860M). The company had hoped for a price of 150-200B yen ($1.3-$1.7B).

Back in April Sanyo said it would shed its lossmaking semiconductor business as part of restructuring efforts. The unit posted sales of 166.5B yen ($1.17B) in the fiscal year ended in March, roughly 11% of the company’s sales, but profitability has suffered due to soft demand and falling prices of digital goods, as well as a major earthquake in Oct. 2004 that damaged the company’s facility in Niigata Prefecture.


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