Chinese Group Hires Bank of America to Fund OmniVision BidAlex Sherman, Ian King and Tim Culpan
Hua Capital Management Ltd., a Beijing-based private equity firm, hired Bank of America Corp. to provide funding for its $1.7 billion bid for U.S. camera sensor-maker OmniVision Technologies Inc.
Bank of America is also advising Hua Capital on the proposed takeover of OmniVision, whose camera sensors have been used in Apple Inc.’s iPhone, Steven Zhang, president of the Chinese firm, said in a phone interview. Hua Capital is leading a group of investors including a Shanghai government-owned company in an offer that values Santa Clara, California-based OmniVision at $29 a share.
The proposed deal would represent an expansion of China’s push to acquire chip industry capabilities. Last year, a Beijing-based university led the acquisition of Spreadtrum Communications Inc., a designer of chips used to connect smartphones to cellular networks. Jiangsu Changjiang Electronics Technology Co. is in talks to buy Singapore-based semiconductor test and assembly company Stats Chippac Ltd.
In August, OmniVision announced it had received an unsolicited offer from the investor group led by Hua Capital. Zhang declined to comment on specifics of the deal, including how much funding Bank of America will provide. Mark Tsang, a spokesman for the Charlotte, North Carolina-based bank, declined to comment, as did Arnab Chanda, a spokesman for OmniVision.
The Hua Capital group is in active discussions to buy OmniVision, Zhang said.
In the past two years, Chinese buyers have announced plans to acquire overseas-listed semiconductor companies valued at more than $5.1 billion, including the proposed purchase of Stats Chippac, according to data compiled by Bloomberg.
Hua Capital was chosen in June to manage the chip design and testing fund under the Beijing government’s 30 billion-yuan ($4.9 billion) Semiconductor Industry Development Fund, according to its website. The Semiconductor Industry Development Fund was set up in December last year to help finance China’s chip industry growth and assist with mergers and acquisitions.
OmniVision, which was co-founded by Chinese immigrant and current Chief Executive Officer Hong Xiaoying, has a number of Chinese- and Taiwan-educated managers among its senior ranks. The company had sales of $1.45 billion last year, little changed from 2013.
Zhang was previously a partner at venture capital firm WestSummit Capital, according to his LinkedIn profile. Chen Datong, a co-founder of OmniVision who no longer works for the company, is a managing partner at WestSummit Capital.
OmniVision’s chips act as the sensors used in smartphones and tablets and their use is spreading to other areas including cars. The stock has rallied 62 percent this year, after a 15 percent jump on Aug. 14 when the company announced the approach from Hua Capital. It closed yesterday at $27.78, about 4.2 percent below the offer price.
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