Belgian-German chipmaker aims for $530mn IPO

Bloomberg

German-based chipmaker
X-Fab Silicon Foundries SE expects to raise about 500 million euros ($530 million) via an initial public offering in order to fund its global production expansion.
The company with headquarters in Erfurt, central Germany, said it intends to list shares on the Euronext Paris exchange in a primary offering of new shares worth 250 million euros as well as a secondary offering that could raise another 250 million euros depending on the valuation afforded those shares.
X-Fab is majority-held by its Belgian founders, including Chief Executive Officer Rudi De Winter. Its semiconductor wafers go into chips designed by its customers for car dashboards, factory floors, doctors’ offices and smartphones.
BNP Paribas SA and HSBC Bank PLC are leading the offering, with Credit Suisse Group AG, Commerzbank AG and Frankfurt’s Oddo Seydler Bank AG also acting as underwriters. The company studied listings in Germany, Belgium and France before choosing Paris because of its investor base and proximity to a major plant, X-Fab CEO De Winter said in an interview.
The Malaysian state of Sarawak, whose Sarawak Technology Holdings owns 35 percent of X-Fab, plans to sell some of its shares in the IPO’s secondary offering, and Japanese electronics company TDK Corp. subsidiary TDK-Micronas with 2 percent, will also sell all of its shares, De Winter said. The IPO will be priced later this month. De Winter and his two partners hold 61 percent of the company and plan to hold onto their shares, he said.
As manufacturers of digital chips that handle the most computing-intensive tasks in PCs and mobile devices move to more sophisticated production processes, X-Fab has been buying up their older factories. It has been converting them to turn out its customers’ analog “mixed signal” chips that can be used to sense rain on a car’s windshield or light its interior when a driver gets in, help detect images in an ultrasound, or read fingerprints on a smartphone’s home button.
X-Fab owns six such plants in Europe, Malaysia and the U.S. and plans to use the IPO proceeds to hunt for more production capacity, De Winter said. “We’re planning $350 million to $370 in investments the next three years and we can finance that with cash flow and bank loans,” he said. “If we have some more cash and leeway we can structure future deals. We want
to be ready.”