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Intel has shortlisted a number of buyout firms for the next round of bidding for its Altera unit, according to people familiar with the matter, as the beleaguered chip maker makes headway on a process started by its now ousted CEO.
Private equity firms including Francisco Partners and Silver Lake Management are competing alongside Lattice Semiconductor in a second round for Altera, which specialises in the design of low-power programmable chips, the people said, asking not to be identified discussing confidential information.
Apollo Global Management and Bain Capital are also pursuing Altera, the people said.
Intel is giving suitors towards the end of January to formalise their offers; other bidders could emerge
Intel is giving suitors towards the end of January to formalise their offers, the people said. It’s possible other bidders could emerge, or the process could end without a sale, they added.
Representatives for Intel, Apollo, Bain Capital, Francisco Partners and Silver Lake declined to comment. A spokesman for Lattice didn’t immediately respond to a request for comment.
The move by Intel to advance the process that was started by former CEO Pat Gelsinger is a sign that the company — previously the world’s biggest chip maker by revenue over almost three decades — is eager to see through already announced plans, even as some have criticised the pace of progress on other initiatives.
Multiple paths
After calling for initial bids prior to the US Thanksgiving holiday in November, Intel has been presented with deal-structure options that range from acquiring a 20-30% stake to taking full control of Altera, the people said. Some parties have outlined multiple paths in their proposals, which value the unit at as little as US$9-billion to more than $12-billion, according to the people. Intel paid roughly $17-billion to acquire Altera in 2015.
For Lattice, any attempt to gain control of the business could prove difficult. Lattice has a market value of $8-billion and is likely to require additional firepower, potentially from a financial partner, to prevail.
Read: The people who might be called on to rescue Intel
Intel chief financial officer David Zinsner, who was named interim co-CEO alongside Michelle Johnston Holthaus this month, told investors at an industry conference that the chip maker “kicked off” the process to engage with outside investors.
Former Intel CEO Pat Gelsinger
“Our thinking is we’ll get another partner in similar to what we did with the IMS business,” Zinsner said at the Barclays Global Technology Conference last week.
Intel sold a 20% stake in its IMS Nanofabrication business in June 2023 to Bain Capital Special Situations in a deal that valued that unit at approximately $4.3-billion. Three months later, it announced the subsequent sale of a 10% stake in IMS to Taiwan’s TSMC at the same valuation. IMS supplies so-called multibeam mask-writing tools that some of the world’s largest semiconductor manufacturers use to produce chips. — Ryan Gould and Liana Baker, with Ian King, (c) 2024 Bloomberg LP
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