TPG-Backed Chip Tester UTAC Is Said to Explore $1 Billion Sale

(Bloomberg) -- UTAC Holdings Ltd., the Singapore-based chip testing firm backed by Affinity Equity Partners and TPG, is exploring options for a sale of its business after completing a bond restructuring, people with knowledge of the matter said.

The company met potential advisers in recent weeks to discuss options that could include an initial public offering or sale, according to the people. Its owners could seek a valuation of about $1 billion including debt from any exit, the people said, asking not to be identified because the information is private.

Global A&T Electronics Ltd., which controlled most of UTAC's operations, filed for bankruptcy in the U.S. in December with a plan to quickly turn itself around. It said the debt load taken on from its buyout a decade ago had prevented the company from growing its business. UTAC completed a capital restructuring in January, cutting its funded debt from about $1.1 billion to $665 million.

Affinity Equity Partners and TPG bought UTAC in a S$2.2 billion ($1.7 billion) leveraged buyout in 2007. UTAC has production facilities in Singapore, Thailand, Taiwan, China, Indonesia and Malaysia, according to its website.

UTAC's private equity owners have made several previous attempts at exiting their investments in the company. They had 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.

A representative for UTAC declined to comment. Affinity Managing Partner KY Tang and an external representative for TPG didn't immediately respond to requests for comment.

UTAC said in February its net loss for 2017 narrowed to $81.4 million, compared with $95.1 million a year earlier. Chief Executive Officer John Nelson said in January UTAC is in talks about acquisitions with at least five industry peers as it seeks to pick up factories in Southeast Asia.

Since the 2007 buyout, UTAC has bought three Panasonic plants in Singapore, Malaysia and Indonesia to expand into the automotive and industrial end markets, according to its website.

--With assistance from David Yong and Cathy Chan

To contact the reporter on this story: Joyce Koh in Singapore at jkoh38@bloomberg.net.

To contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net, Andrew Monahan

©2018 Bloomberg L.P.