Feb. 8, 2008 – Michel Mayer, chairman and CEO of Freescale Semiconductor, is stepping aside, four years after joining the company and leading it through its spinoff from Motorola, subsequent IPO, and leveraged buyout. The company indicated that Mayer will stay on in his current role until the search for a new CEO is completed, and will remain chairman through the transition.
“Following a successful IPO, we dramatically improved the operating profitability of the company and strengthened the leadership team,” said Mayer, in a statement. “One year into a successful LBO, the time is right for me and my family to take some time off before exploring new challenges.”
Earlier this month Freescale agreed acquire IC maker SigmaTel for around $110M in cash ($3/share), to boost its mixed-signal offerings in devices such as portable media players and consumer audio. And it recently ramped up a 200mm MEMS line in Texas. But Freescale has been a significant underperformer for Blackstone Group since its $17.5B LBO in Dec. 2006, notes Barrons — revenue fell in 2007 to $5.7 billion, with pretax cash flow down 18% to $1.5 billion, and the firm sports $9 billion of debt.
And recent news for the company hasn’t been good. In iSuppli’s preliminary estimates of 2007 global semiconductor sales, Freescale slid out of the top 10 (-10.7% growth), as far-away largest customer Motorola continued to lose share to Nokia and Samsung. Freescale’s sales of chips for cell phones sunk 18% to $1.2B in 2007, and reported a ~$450M charge in 4Q07 to reflect reduced value of that business. Motorola, meanwhile, has nodded to speculation that it might sell off its cell phone business entirely.