This Insight discusses the recent news that three groups of private equity firms are bidding in an auction to buy Philips Electronics' Semiconductors division. We review the options available to Philips: an initial public offering (IPO), a spin-off of the Semiconductors team into a private or public company, a sell-off of groups or the entire entity to another technology company, and the private equity route. We also provide our viewpoint regarding the potential valuation of the division, our opinion on the strategy to sell off the division to a private equity firm, and our strategic recommendations to the new owners of the group that will help make the new standalone entity more successful moving forward.

Companies Mentioned: Philips; Silver Lake Partners; Kohlberg Kravis; KKR

• In This Insight
• Situation Overview
  • Background on Philips Semiconductors
    • Consumer Semiconductors
    • Wireless Semiconductors
    • Other Semiconductors
  • Industry Comparisons with Philips Semiconductors
  • Table: Comparables to Philips Semiconductors
• Future Outlook
  • Consumer Semiconductor Business
    • CRT TVs
    • Flat-Panel DTVs
    • Set-Top Boxes and Media Adapters
    • Consumer Front-End Solutions
    • Portable Media Players and Other Portable Entertainment
    • Other Home Business Unit Products
  • Wireless Semiconductor Business
    • Cellular Products
    • Connectivity Products
    • Other Cordless and Miscellaneous Products