Private equity buyout giants Silver Lake and Bain Capital are expected to bid for a minority stake in Intel’s Altera unit, the tech major’s programmable chips business acquired for nearly $17bn in 2015, according to a report by Reuters.
The report cites unnamed sources familiar with the matter as highlighting that Intel recently initiated a process to divest part of Altera and establish it as a standalone entity, with initial bids from interested buyers anticipated in the coming weeks. The talks are still in early stages, sources said, as Intel seeks a valuation for Altera close to its original acquisition price.
Francisco Partners, another private equity firm, has also shown interest and is expected to be among the bidders, one source mentioned. However, no deal is guaranteed at this point, the sources cautioned.
The exact stake Intel will sell remains unclear, although any transaction is likely to be valued in the billions, the sources said. For the quarter ending 30 September, Intel reported that Altera’s revenue grew 14%, reaching $412m.
Intel CEO Pat Gelsinger confirmed the divestiture plans on a recent earnings call, stating, “We remain focused on selling a stake in Altera, paving the way for its IPO in the coming years. We’ve begun discussions with potential investors and expect to conclude by early 2025.”
Any transaction could provide Intel with a crucial cash infusion, as the company considers cost-cutting measures and strategic divestments amid challenging market conditions. Intel’s latest revenue forecast was upbeat, yet its stock remains down over 50% this year, as it struggles with a turnaround and faces challenges in the AI-driven market.
