VC-backed Montage Technology targets $115m US IPO
Montage Technology Group, a China-based semiconductor manufacturer backed by AsiaVest Partners and Intel Capital, is seeking to raise up to $115 million through a NASDAQ IPO. It is set to become only the second PE-invested Chinese company to go public in the US this year.
According to a regulatory filing, Montage will use the proceeds to supply working capital to its four subsidiaries outside China, pay overseas suppliers, and fund operational expansion as well as possible future acquisitions.
It is unclear whether AsiaVest and Intel plan to exit all or part of their holdings through the offering, but they have been investors in the company for more than seven years.
AsiaVest Opportunities Fund IV, Intel Capital, Shanghai Hua Hong, Silicon Federation and a number of individual investors committed $10.5 million for a 20% stake in Montage in June 2006, AVCJ Research's records show. AsiaVest currently holds a 19.2% interest - and is the company's single largest shareholder - while Intel Capital has 10%.
Montage produces analog and mixed-signal semiconductor solutions for the home entertainment and cloud computing markets. Its products are often used in set-top boxes, optimizing broadcast signal processing, and in memory-intensive server applications. Since it was founded in 2004, the company has sold more than 230 million integrated circuits to over 150 customers worldwide.
Revenue reached $78.2 million in 2012, up from $29.1 million in 2010, representing a compound annual growth of 64%. Montage posted a net income of $18.3 million in 2012, turning around a net loss of $8.5 million in 2010.
Citing data provided by iSuppli, the company said that 154 million set-top boxes were sold by Chinese manufacturers last year, with two thirds shipped overseas. This is expected to jump to 243 million units by 2016, driven by increased demand for cable and high-definition cable set-top boxes.
As for cloud computing, Cisco projects that global data center IP traffic will increase from 1.8 zettabytes in 2011 to 6.6 zettabytes in 2016, due to the proliferation of mobile devices, cloud-based software applications and streaming video. Data centers will have to boost server numbers to accommodate this traffic - it is estimated that an additional server is required for every 120 tablet devices sold.
In June, Beijing-based online retailer LightInTheBox became the first Chinese company to go public in the US this year. The company, which is backed by Ceyuan Ventures, GSR Venture and Trustbridge Ventures, raised $79 million.
A total of 15 Chinese companies went public in the US in 2011 but this fell to just two last year - discount clothing website Vipshop and Guangzhou-based social networking platform YY.
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