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KKR Gains 6.8% Stake in Marvell

12/31/2013 00:00 AM EST 

MADISON, Wis. -- Private equity firm KKR & Co. LLP has amassed a 6.8 percent stake in Marvell Technology Group, according to aregulatory filing.

While KKR’s investment in Marvell was first reported by Bloomberg News early November, the transaction only became public after market close on Monday, through KKR’s filing with the Securities and Exchange Commission.

What remains unclear, however, is KKR’s motive in acquiring a stake in Marvell. It’s not known if and when any conversation or negotiation took place prior to the transaction, between KKR and Marvell’s co-founders Chief Executive Officer Sehat Sutardja and his brother Pantas. The Sutardja brothers reportedly own more than 20 percent of the company.

Marvell is keeping mum on KKR’s investment in the company. Marvell’s spokesman Sukhi Nagesh told EE Times that as a matter of policy, Marvell does not comment on investments or market activities of any of the company’s investors.

However, speculation abounds, including the scenario that KKR might be considering a leveraged buyout of Marvell, or that KKR might be planning the merger or reorganization of Marvell’s business.

As to the purpose of transaction, KKR wrote in the SEC filing that KKR “acquired beneficial ownership of the securities reported herein for investment purposes and intend to review their investments in the Issuer on a continuing basis.”

This boilerplate statement is nothing to write home about, but KKR added in the filing that the firm “may engage in discussions with management, the board of directors, stockholders of the Issuer and other relevant parties or take other actions concerning any extraordinary corporate transaction (including but not limited to a merger, reorganization or liquidation) or the business, operations, assets, strategy, future plans, prospects, corporate structure, board composition, management, capitalization, dividend policy, charter, bylaws, corporate documents, agreements, de-listing or de-registration of the Issuer.”

This addition leaves the door open for KKR to take more of an activist role in Marvell’s future operations.

Marvell is currently involved in a large US patent dispute with Carnegie-Mellon University. A federal jury in Pittsburgh ordered the company in December, 2012, to pay a $1.17 billion award for infringing Carnegie-Mellon patents covering hard disk drive integrated circuits. Marvell failed to overturn the jury verdict in September, 2013, but it has pledged to appeal the decision to the U.S. Court of Appeals for the Federal Circuit.

確定了！KKR購股網通IC廠Marvell盤後漲近5%

鉅亨網新聞中心　(來源：精實新聞)　2013-12-31 09:05:05　

私募股權投資公司KKR & Co. 30日盤後呈報美國證交會(SEC)檔案顯示，該公司購入網通IC設計大廠美滿電子科技(Marvell Technology Group)股權，持股6.8%。

The Street報導，KKR表示可能會和管理階層商討公司行動(corporate actions)，如出售企業、董事會改組、或發放股息等。KKR透過近期結束的North America Fund XI，融資收購美滿電子股權。美滿電子正和卡內基美隆大學(Carnegie Mellon University)進行專利訴訟，可能損失逾10億美元。

費城半導體指數成分股美滿電子30日正常盤漲0.95%收13.76美元，盤後跳漲4.65%至14.40美元。今年迄今股價大漲近90%。

KKR相中美滿電子的訊息11月初由彭博社率先揭露。該社報導，KKR認為美滿電子股價遭到低估，已購入近5%的股權。訊息顯示，KKR已和美滿電子共同創辦人兼執行長Sehat Sutardja以及他的兄弟Pantas Sutardja討論過股權事宜。此外，KKR甚至考慮對美滿電子進行槓桿收購(leveraged buyout)，但這筆交易短期內應該還不會成行。

RBC Capital Markets分析師Doug Freedman表示，美滿電子有創造現金的能力，而且還沒有負債、能夠便宜借款，這使得該公司成為槓桿收購的良好標的。他說，美滿電子股權集中的特性可簡化槓桿收購的過程。彭博社統計顯示，Sutardja兄弟目前擁有美滿電子超過20%的股權，而知名沖基金經理人David Einhorn掌管的Greenlight Capital Inc.則持有9%股權。

KKR Said to Buy Stake in Semiconductor Maker Marvell Tech

By Kiel Porter, Jodi Xu and Ian King  Nov 6, 2013 5:24 

FebAprJunAugOct7.5010.0012.5015.00MRVL:US14.380.62 4.51%* Price chart for MARVELL TECHNOLOGY GROUP LTD. Click flags for important stories.

KKR & Co. (KKR) has acquired almost 5 percent of computer chipmaker Marvell Technology Group Ltd. (MRVL), two people with knowledge of the matter said.

KKR sees the Hamilton, Bermuda-based company as undervalued and has discussed its holding with the company’s co-founders, Chief Executive Officer Sehat Sutardja and his brother Pantas, said one person, who asked not to be identified as the information is private. One scenario New York-based KKR is considering is a leveraged buyout of Marvell, though no such deal is imminent, the person said.

Marvell’s stock rose 8.5 percent to $13.04 at the close in New York, the biggest one-day gain since May 2011. The shares have climbed 80 percent this year.

Marvell’s ability to generate cash, its lack of debt and ability to borrow cheaply make the company a good candidate for a transaction, according to Doug Freedman, an analyst atRBC Capital Markets in San Francisco. The large stake still held by the founders would also simplify the process, he said.

“The fundamentals at Marvell are some of the best in the semiconductor industry right now,” said Freedman, who recommends buying the stock. “It is very tightly held by ownership, which makes it an easier leveraged buyout.”

A 5 percent stake, which would have to be publicly disclosed, is valued at about $296 million, based on Marvell’s market value of $5.9 billion yesterday. The Sutardja brothers own over 20 percent of the company, while Greenlight Capital Inc., the hedge fund run by David Einhorn, owns another 9 percent, according to data compiled by Bloomberg.

Cash Position

Kristi Huller, a spokeswoman for KKR, and Sukhi Nagesh, a spokesman for Marvell, declined to comment. Sehat Sutardja didn’t reply to a phone call and e-mail seeking comment.

The company has $1.7 billion of cash and equivalents, it said in August. It has no debt and reported net income of $61.8 million on $807.1 million of sales in its latest quarter.

Marvell, which designs processors used in communications equipment and mobile phones, has gained 65 percent this year through yesterday. Shares tumbled late in 2012, when a federal jury in Pittsburgh ordered the company to pay a $1.17 billion award for infringing Carnegie Mellon patents covering integrated circuits.

The decision, the fourth-largest U.S. patent verdict ever according to data compiled by Bloomberg, was upheld by a judge in September. Marvell has pledged to appeal the decision.

KKR Deals

KKR, which had $90.2 billion in assets under management at the end of the third-quarter, has announced only one technology related takeover in the last year, data shows. The company in September agreed to buy Mitchell International Inc., a company that provides technology to insurance firms and collision-repair facilities.

KKR’s biggest technology deal was its $27.5 billion buyout of First Data Corp., a debt- and credit-card processor, in 2007. Its technology holdings include financial-software supplier SunGard Data Systems Inc. and chipmaker NXP Semiconductor NV. (NXPI)

Source:  http://www.bloomberg.com/news/2013-11-05/kkr-said-to-buy-stake-in-semiconductor-maker-marvell-tech.html