NXP Semiconductors Chief Sees Private Equity Reducing Stakes

NXP Semiconductors NV’s chief executive officer predicted that private-equity investors will cut holdings in Europe’s third-largest chipmaker within a year as its shares climb.

“After being at the company for about six years, we are coming to the time where some would typically reduce their position,” CEO Richard Clemmer said in an interview at the Mobile World Congress in Barcelona today. “That will quite possibly increase the free float, even though it won’t happen imminently.”

Private-equity firms hold more than half of Eindhoven, Netherlands-based NXP, which last year carried out a secondary offering at about $30 a share. KKR & Co. has 15.8 percent, Fidelity Management & Research Co. has 13.6 percent, Bain Capital Ltd. holds 12.8 percent and PPTL Investment LP has 12.2 percent, according to data compiled by Bloomberg.

The chipmaker is targeting “significant” sales growth in China toward the second half as it benefits from government reforms affecting financial institutions, Clemmer said. Asia, where the company employs more than half its workforce, accounts for 65 percent of revenue and China alone accounts for about 45 percent, he said.

NXP shares dropped as much as 1.6 percent, reversing earlier gains, and traded 1 percent lower at $24.84 as of 11:49 a.m. in New York. The stock has climbed 62 percent this year.

“From an economic point of view, what happens in China is more important for us than Europe as China is the largest country in the world where we ship products,” Clemmer said. “The Chinese government move towards change including financial institutions in the second quarter will improve our sales significantly.”

To contact the reporters on this story: Manuel Baigorri in Madrid at mbaigorri@bloomberg.net;

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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