Intel Cancels IPO Carveout Of Altera

Forbes

16-04-2025

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On April 14, 2025, Intel Corp (NASDAQ: INTC, $19.85, Market Capitalization: $86.6 billion), a leading technology company, announced that it has entered into a definitive agreement to sell 51% of its Altera business to Silver Lake, a global leader in technology investing. (for more information, visit spinoffresearch.com). The transaction, which values Altera at $8.75 billion, establishes Altera's operational independence and makes it the largest pure-play FPGA (field programmable gate array) semiconductor solutions company. Altera offers a proven and highly scalable architecture and tool chain and is focused on driving growth and FPGA innovation to meet the demands and opportunities of an AI-driven market. Intel will own the remaining 49% of the Altera business, enabling it to participate in Altera's future success while focusing on its core business. The transaction is expected to close in the 2H25, subject to customary closing conditions. Upon closing of the transaction, Intel expects to deconsolidate Altera's financial results from Intel's consolidated financial statements. Morgan Stanley & Co. LLC acted as financial advisor to Intel. Earlier on October 3, 2023, Intel had announced its intention to separate its Altera (Programmable Solutions Group) operations into a standalone business and intended to conduct an IPO for the Altera business and explore opportunities with private investors to accelerate the business's growth, with Intel retaining a majority stake.
Furthermore, Intel also announced that Raghib Hussain will succeed Sandra Rivera as chief executive officer of Altera, effective May 5, 2025. Hussain is a highly accomplished and visionary technology executive with strong business acumen and engineering credentials. He joins Altera from his previous role as president of Products and Technologies at Marvell. Prior to joining Marvell in 2018, Hussain served as chief operating officer of Cavium, a company he co-founded. Prior to Cavium, Hussain held engineering roles at both Cisco and Cadence and helped found VPNet, an enterprise security company.
Intel Corp Price Performance Carve-Out Details and Top 5 Shareholders
Valuation and RecommendationWe have dropped coverage on INTC as the planned IPO transaction has been canceled.
Key Data
Company DescriptionIntel Corp (Parent)
Founded in 1968, Intel Corp (NASDAQ: INTC) is the world's largest logic chipmaker. It designs and manufactures microprocessors for the global personal computer and data center markets. Intel pioneered the x86 architecture for microprocessors. It was the prime proponent of Moore's law for advances in semiconductor manufacturing, though the firm has recently faced manufacturing delays. While Intel's server processor business has benefited from the shift to the cloud, the firm has also been expanding into new adjacencies as the personal computer market has stagnated. These include areas such as the Internet of Things, artificial intelligence, and automotive. Intel has been active on the merger and acquisitions front, acquiring Altera, Mobileye, and Habana Labs to bolster these efforts in non-PC arenas. The company reported a total revenue of $53.1 billion in FY24.
Altera (Carve-Out) - Cancelled
Acquired by Intel for $16.7 billion in 2015, Altera is a leading supplier of programmable hardware, software, and development tools that empower designers of electronic systems to innovate, differentiate, and succeed in their markets. With a broad portfolio of industry-leading FPGAs, SoCs, and design solutions, Altera enables customers to achieve faster time-to-market and unmatched performance in applications spanning data centers, communications, industrial, automotive, military, aerospace, and government, as well as emerging markets such as AI/edge and robotics. Its broad portfolio of programmable semiconductor solutions, software and development tools delivers the reliability and flexibility needed to accelerate customer technology innovation. For FY24, Altera generated revenues of $1.54 billion, a GAAP gross margin of $361 million and a GAAP operating loss of $615 million. Altera's Fiscal Year 2024 non-GAAP gross margin was $769 million, and non-GAAP operating income was $35 million.