Big Deals: Philips Semiconductor LBO

Semiconductors aren't sexy enough for Royal Philips Electronics N.V. The Dutch technology conglomerate announced August 3 that it had sold an 80 percent stake in its chips unit to Kohlberg Kravis Roberts & Co., Silver Lake Partners, and AlpInvest Partners, N.V. Apax Partners, Inc., and Bain Capital, LLC, later joined the buyout group. The five private equity shops will invest $4.25 billion in the business, and will also assume $5 billion in debt. The parties hope to close the deal in the fourth quarter.

The deal is the largest leveraged buyout of a technology company since last year's $11.3 billion buyout of Sungard Data Systems Inc. [Big Deals, June 2005]. Six PE houses teamed up on that deal, KKR and Silver Lake among them. Those two shops had to beat out some of their partners on the SunGard deal in the bidding for the Philips unit. The Blackstone Group L.P. and Texas Pacific Group reportedly teamed with Permira Advisors Limited to bid for the semiconductor business, while Apax, Bain, and Francisco Partners Management LLC also joined forces for the Philips auction. Silver Lake led a group that included Blackstone, Bain, KKR, TPG, and GS Capital Partners in the SunGard deal.

For acquirers Kohlberg Kravis Roberts & Co. (New York), Silver Lake Partners (Menlo Park, California), and AlpInvest Partners N.V. (Amsterdam)

In-house: At Silver Lake: General counsel Karen King. At AlpInvest: Senior legal counsel Kees de Ru.

Simpson Thacher & Bartlett: M&A: Gregory Conway, Mark Pflug, and associates Juerg Frick, Álvaro Gomez de Membrillera, David Wagner, and Thomas Wedeles. Financing: G. Hartwell Hylton and associates Sinead O'Shea, Nicholas Shaw, and Harald Zeiter. Antitrust: David Vann, counsel Michael Naughton, and associate Olivier Antoine. Tax: Steven Todrys, counsel Meredith Jones, and associate Jenifer Marsh. Intellectual property: Lori Lesser and associate Philippine Dodd. (All are in London except for Wagner, who is in Palo Alto, and Naughton, Antoine, Todrys, Lesser, and Dodd, who are in New York.) Simpson regularly advises KKR and Silver Lake. King, Silver Lake's GC, is a former Simpson associate.

Clifford Chance: M&A:Thijs Alexander, Charles Eijsbouts, and associates Laura Bodfish, Roos Brounts, Gregory Crookes, and Nicholas Golding. Competition: Geert van der Klis and associate Barbara Nijs. Corporate finance: Daniel Kossoff and Brandon Moylan. Employment: associate Tom Schaafstra. Real estate: associate Maarten Hoogstraate. Intellectual property: associates Ron Moscona and Erik Vollebregt. (All are in Amsterdam except for Kossoff, Moylan, and Moscona, who are in London.) Clifford Chance represented the PE consortium that agreed to buy VNU N.V. [Big Deals, August], a group that included both KKR and AlpInvest.

Sullivan & Cromwell: Corporate: Richard Morrissey. (He is in London.) Sullivan represented Silver Lake on the intersponsor agreement. The firm has previously worked for the PE shop.

For acquirers Apax Partners, Inc. (New York) and Bain Capital, LLC (Boston)

In-house: At Bain: General counsel Sean Doherty.

Kirkland & Ellis: Corporate: Jon Ballis, Erik Dahl, David Patrick Eich, Stephen Gillespie, James Learner, Sam Pakbaz, Jeffrey Richards, Matthew Steinmetz, and associates Anu Balasubramanian, Edward Donovan, and Jonathan Jacobs. Tax: John Baldry, Gregory Gallagher, and Ian Taplin. Intellectual property: Pierre-Andre Dubois and Jeffery Norman. ERISA: Alexandra Mihalas. (All are in London except for Ballis, Richards, Steinmetz, Donovan, Gallagher, Norman, and Mihalas, who are in Chicago, and Dahl, who is in Munich.) Kirkland regularly advises both Bain and Apax.

For seller Royal Philips Electronics N.V. (Amsterdam)

In-house: Chief legal officer Eric Coutinho, deputy general counsel Charles Smit, general counsel-Philips Semiconductors Guido Dierick, and vice presidents-corporate legal department Jean Scheurs and Ivo Verheijden.

Sullivan & Cromwell: Corporate: Neil Anderson, Garth Bray, S. Neal McKnight, Andrew Soussloff, and associates Jeffrey Lynn, Joseph Martin, Adam McLain, Trevor Ogle, Kathryn Plunkett, and Mathias Strasser. Tax: Andrew Solomon. Employee benefits: associate Rebecca Coccaro. Environmental: special counsel Matthew Brennan. Intellectual property: special counsel Anna Kuzmik. (All are in London except for Anderson, Soussloff, Ogle, and Brennan, who are in New York, and Coccaro, who is in Washington, D.C.) Sullivan received waivers from Philips and Silver Lake to represent each party on the deal.

De Brauw Blackstone Westbroek: M&A: Arne Grimme, Dieter Wolff, and associate Anja Mutsaers. Tax: Dick Hofland. Intellectual property: associate Bart van Reeken. (All are in Amsterdam.) De Brauw has long advised Philips.

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