Tsinghua University investment arm makes buyout offer for Spreadtrum
Spreadtrum Communications, a Chinese mobile chip manufacturer backed by NEA, has received a buyout offer from a unit of Tsinghua Holdings, an investment entity controlled by Beijing-based Tsinghua University. The offer values Spreadtrum at $1.35 billion.
According to a regulatory filing, Tsinghua Unigroup will pay $28.50 in cash for all outstanding American Depository Shares - a 20% premium on the stock's previous closing price. Spreadtrum's stock jumped more than 16% in response to the announcement, closing Friday at $25.91.
As of year-end 2012, NEA owned 10.4% of the company, having initially participated in the $19.8 million Series B round in 2002. Spreadtrum went public on NASDAQ in 2007, raising $124.6 million. Silver Lake bought a 13% stake for $40 million in 2010 but exited the following year.
In 2011, Spreadtrum also came under fire from short-seller research firm Muddy Waters over alleged accounting discrepancies. The company denied any wrongdoing.
"We believe that an Acquisition by Tsinghua Unigroup, which is majority-owned by Tsinghua University, a central player in China's technology and R&D sectors, would provide compelling strategic synergies and position the company for additional value creation in key wireless communications markets in China and elsewhere going forward," Unigroup CEO Weiguo Zhao said in a letter to shareholders.
Tsinghua Holdings has committed to guarantee full equity or debt funding up to the total purchase price of $1.5 billion.
Spreadtrum was founded in 2001 and develops mobile chipset platforms for 2G, 3G and 4G wireless communication standards. Customers include handset manufacturers selling into China and other emerging markets. The company posted a net income of $92.4 million for 2012, down from $134 million the previous year, although revenues jumped 7.6% to $725.2 million.
Tsinghua Holdings is a state-owned company responsible for managing the majority of Tsinghua University's commercial assets. As of year-end 2012, Tsinghua Holdings had approximately RMB70.4 billion ($11.5 billion) in assets and a net income of RMB1.45 billion. Unigroup focuses on high-tech, biotech, real estate and urban infrastructure investments.
Tsinghua Science Park Venture Capital, which also ultimately falls under the control of Tsinghua Holdings, participated in Spreadtrum's Series A and B rounds.
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