Dutch chipmaker NXP Semiconductors NV NXPI.O, the first of four big private equity-backed IPOs in the U.S. pipeline, priced shares in its stock flotation more than 28 percent below the midpoint of the expected range, according to an underwriter.
KKR and Bain Capital, which led the 2006 buy-out, cut the price of the shares on offer to $14, from the $18-$21 that had previously been indicated. That reduced the amount raised from the deal to $476m. The stock is due to start trading on Friday.
NXP originally filed for an IPO worth up to $1.15 billion, but later said it only hoped to raise $663 million when it set the terms for the deal in late July. Deutsche Bank AG lost its underwriting slot for the IPO in April because it refused to renew a $60 million line of credit for the chipmaker.
The producer of semiconductors used in everything from radars to hearing aids and pachinko machines has reported combined losses of $5.5 billion since the takeover. KKR, the New York buyout firm founded by billionaire investors Henry Kravis and George Roberts, said in May its stake in NXP was worth 40 cents on the dollar.
Bankers in Silicon Valley warn, though, that the deals come at a time when valuations are at historically low levels for tech IPOs, putting the buy-out firms that moved into the industry in the middle of the decade at a disadvantage.
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