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Avago Files For $400m IPO

The company arising from the 2005 private equity buyout of the Agilent's semiconductor products group is returning to public listing to pay off some of its debts.

Chip maker Avago Technologies is to brave a re-flotation on the turbulent post-credit crunch stock market, with the hope of raising up to $400 million.

Avago filed papers for an initial public offering (IPO) with the US Securities and Exchange Commission (SEC) on 21 August. The Singapore-registered company has applied to list on the NASDAQ exchange with the proposed ticker “AVGO". No share price or date for the offering is listed, and neither does the filing say what proportion of the company is being floated.

Part of the IPO proceeds will be used to pay off $240.5 million of Avago s $710 million long-term debt currently outstanding.

Perhaps best known in the compound semiconductor industry for its LEDs and GaAs wireless chips, Avago largely focuses on III-V manufacturing at its Fort Collins, Colorado, and Singapore fabs. However the majority of its manufacturing is done by silicon foundries such as Chartered Semiconductor and TSMC.

The IPO would take Avago public again, nearly three years after it was carved out of Agilent Technologies, which itself is a spin-off from Hewlett-Packard.

While Agilent now concentrates on test and measurement, Avago s focus is on analog semiconductors across several markets including industrial and automotive, datacoms, wireless communications, and consumer applications.

Private equity firms Kohlberg Kravis Roberts (KKR) and Silver Lake Partners bought the former Agilent semiconductor and optical transceiver business for a whopping $2.66 billion in 2005.

At first Avago struggled, recording a loss of $227 million in fiscal 2006 and $159 million in fiscal 2007, but the company has clawed its way back to profitability. It posted a $21 million profit for the first half of fiscal 2008 on revenues of $813 million.

Since KKR purchased it, the chip maker has slimmed down by disposing of five businesses. The largest of these was the sale of its storage business to PMC-Sierra for $420 million in 2007.

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