The ASAT LBOby Professor Ian H. Giddy
New York University
This reports on the 1999 leveraged buy-out of the Hong Kong-based semiconductor assembly company, ASAT Ltd.
"We are zipping along," says Dick Brancato, president of ASAT USA, Fremont, California. "In the last few months, we have reached a run-rate of $300 million to $350 million a year. We increased capacity in Hong Kong 25% over the past few months, and over the next two quarters, we will increase capacity another 25%. Business is fantastic." Under the new ownership structure, ASAT is 50% owned by QPL and 50% owned by the financial investor group led by Chase Asia Equity Partners and consisting of Olympus Capital and Orchid Asia. TL Li, the major shareholder in QPL, becomes chairman of the new ASAT. Jerry Lee, the chief executive officer, will assume operating responsibilities at a day-to-day level.
"It's been a tremendous year," says Brancato. "The whole team has worked hard to turn ASAT around and get back to its roots of providing leading edge technology with a superior customer service quotient. There have been continuous and large investments in equipment and support infrastructure for our factories as well as our USA customer support staff. The investment ensures that we will meet our leadership target." ASAT Hong Kong is a provider of turnkey solutions in IC package design, assembly and test featuring TBGA, fpBGA, LPCC, OptiPad and other plastic packages.
The firm says it is "well-positioned to achieve strong growth. The shareholders are united in their conviction to build ASAT, over the next few years, into one of the most successful assemblers of IC packages in the world."The financing of the deal was done through a US$150m high-yield bond (which was going through a roadshow in October), a US$60m syndicated bank loan and equity contributions from the partners in the consortium.
Chase's Mr Weiss says that in such deals there is the
the template of leveraged transactions in the US in the 1980s and
currently being repeated in Europe, is slowly taking shape in Asia as
ASAT web site