Shares of Conexant Systems Inc. closed 3.7% higher Wednesday after the Newport Beach chipmaker said it expects to get $100 million from the sale of its stake in Jazz Semiconductor Inc., its former chip plant in Newport Beach.
Conexant, which split off Jazz in 2002, owns 42% of the chip plant operator.
On Tuesday, Newport Beach’s Acquicor Technology Inc. said it’s paying $260 million for Jazz, which makes chips for Conexant and other companies.
Carlyle Group owns about half of Jazz. The deal is expected to close in the first quarter.
“From a Conexant perspective, our share of the proceeds from this transaction will significantly strengthen our balance sheet and provide us with improved liquidity,” Conexant Chief Executive Dwight Decker said.
Conexant had been looking to cash out its Jazz stake in an initial public offering. The company plans to use the proceeds from Jazz’s sale to pay down debt.
The rise in Conexant’s stock helped push the company’s market value to $975 million at recent check.
