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Flextronics to Sell Software Development Biz for USD 900 mln

Flextronics has signed a definitive agreement to sell its software development and solutions business to an affiliate of Kohlberg Kravis Roberts & Co. (KKR), in a transaction valued at approximately USD 900 million. The deal marks KKR's first purchase in India and second investment in Asia, following its 2005 investment in Avago Technologies, the former semiconductor-products group of Agilent Technologies Inc

Upon closing, Flextronics expects to receive in excess of USD 600 mln in cash consideration and will hold a USD 250 million face value note with a 10.5% paid-in-kind interest coupon that will mature in eight years. Singapore-based Flextronics will also retain a 15% equity stake in the business, which will operate as an independent software development and solutions company.

Flextronics expects the after gain tax on the sale transaction to be approximately USD 175 million.


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