TPG-Backed Chip Tester UTAC Taps Citigroup for $1 Billion Sale

(Bloomberg) -- UTAC Holdings Ltd., the Singapore-based chip testing firm backed by TPG, has appointed Citigroup Inc. to advise on a planned sale of its business, people with knowledge of the matter said.

The company, which also counts Affinity Equity Partners as an investor, has started gauging interest from potential buyers, according to one of the people. UTAC could fetch at least $1 billion, the people said, asking not to be identified because the information is private.

UTAC may attract interest from private equity funds and Chinese semiconductor firms, said the people. The company explored options for the business last year, including a sale and an initial public offering, after completing a bond restructuring, Bloomberg News reported at the time.

Chief Executive Officer John Nelson said in August that customer orders were growing after it overcame its debt overhang, signaling a better outlook in the coming years. Representatives for UTAC, TPG and Citigroup declined to comment, while Affinity didn’t immediately respond to a request for comment.

Affinity and TPG bought UTAC in a S$2.2 billion ($1.6 billion) leveraged buyout in 2007. The private equity owners have made several attempts to exit the investment. They pursued a Singapore IPO in 2011, people with knowledge of the matter said at the time. UTAC later filed for a U.S. share sale in 2015, before withdrawing its registration the next year, citing unfavorable market conditions.

UTAC assembles and tests semiconductor chips used in industries from communications to health care, according to its website. It has manufacturing facilities in Singapore, Thailand, Taiwan, China, Indonesia and Malaysia.

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