Hyundai Electronics Industries Co and its US subsidiary, Hyundai Electronics America Inc, have agreed to sell a 90% interest in their ChipPAC business to a group of investors led by existing management. The managers are supported by Bain Capital Inc and CitiCorp’s SXI Group LLC portfolio investment arm. Hyundai receives $550m of cash, stock and debt cancellation as a result of the deal.
ChipPAC is the assembly and testing company division of Hyundai, with 3,500 employees and offices in the US, Japan, Korea, Singapore and the Netherlands. Unusually, it packages chips ranging from basic 8-pin up to 2000–pin parts in wire-bond, ball-grid array, chip-scale packaging and flip-chip interconnect systems. Most of its customers are in the US, although business in Europe, Japan and the rest of Asia is growing rapidly, it says.
Hyundai, which needs the cash as it buys rival LG Semicon, said the divestment would allow both companies to serve their individual markets more fully. Hyundai also offered the deal as proof that it could still attract foreign capital to Korea despite the country’s current economic troubles. It will remain a shareholder in ChipPAC.
Hyundai raised $1.3bn from the sale of US assets last year. Symbios Logic was
sold to LSI Logic for $760m and Maxtor’s Nasdaq listing raised $330m. It sold a mask shop to Dupont for $31m and a stake in the Global Mobile Personal Communications Service to Loral for $82m.
