UPDATE 4-Freescale IPO prices below range
* Shares sold at $18 each, below expected range
* Company had planned to sell shares for $22-$24
* Freescale was taken private in 2006
(Adds background about private equity exits)
NEW YORK, May 25 (Reuters) - Freescale Semiconductor Holdings , bought by buyout firms near the peak of the private equity boom in 2006, raised a less-than-expected $783 million in its initial public offering on Wednesday.
The chipmaker sold 43.5 million shares for $18 each, the company said. It had planned to sell the shares for $22 to $24 each.
Freescale was taken private in 2006 in a $17.6 billion buyout by a private-equity consortium led by Blackstone Group LP and including Carlyle Group and TPG Capital LP .
That deal, which is the biggest leveraged buyout of a technology company on record, has been described by some investors as one of the most unsuccessful because it left Freescale with massive debt, hurting its ability to compete in the investment-intensive chip market.
Freescale, whose rivals include Texas Instruments Inc and STMicroelectronics NV , was spun off from Motorola in 2004.
The IPO pricing implies a total equity valuation of about $4.3 billion for Freescale, based on its price and the company's expectation for 240 million shares outstanding after the IPO.
On an enterprise value basis -- which includes debt -- Freescale will have an implied valuation of about $12 billion.
While that is less than the value of the 2006 leveraged buyout deal, the private equity owners will have the opportunity to make more money through secondary share offerings at future dates.
Private equity firms buy companies with the aim of exiting their investments a few years later with a large profit.
There has been a surge of exit activity recently as stock markets have rebounded and cash-rich companies demonstrate they are willing to buy assets owned by private equity firms.
Recent data by London-based research firm Preqin showed that there were 201 private equity-backed exits so far this quarter valued at $85 billion, which beat a record set in the fourth quarter of 2010.
Freescale, whose chips are used in cars, cellphones and consumer products like Amazon.com Inc's Kindle electronic reader, plans to use the IPO proceeds to pay off some of the $7.6 billion in debt it still had on its books in the first quarter, when it posted a net loss of $148 million.
The Austin, Texas company, which plans to list on the New York Stock Exchange under the symbol "FSL", is a major supplier of chips for entertainment systems, brakes and airbags in cars.
Citigroup and Deutsche Bank Securities led the underwriters on the IPO.
On Tuesday, Applied Materials Inc , the world's top supplier of semiconductor manufacturing equipment, orecast net sales in its fiscal third quarter to be down 3 percent to 10 percent sequentially, saying concerns about a tough economy have led chipmakers to delay spending to expand capacity. [ID:nN24194146] (Reporting by Sinead Carew, Megan Davies and Clare Baldwin; Editing by Andre Grenon and Carol Bishopric)
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