The short-lived rivalry for Newport Beach’s Conexant Systems Inc. that was settled last week leaves a key question unanswered.
Who’s going to run the chipmaker?
San Francisco private equity firm Golden Gate Private Equity Inc. is set to take Conexant private by midyear in a $282 million buyout.
Golden Gate prevailed in a brief contest with Hauppauge, N.Y.-based chipmaker Standard Microsystems Corp., which offered $270 million for Conexant in January and opted not to up its offer last week.
Under Standard’s buyout plan, Conexant President Sailesh Chittipeddi was set to run the business and take on a larger companywide engineering role.
Conexant Chief Executive Scott Mercer, who’s led a restructuring that drew the buyout interest, is stepping down.
Now under Golden Gate, Chittipeddi is set to have a “senior management role,” according to Conexant.
Whether he will take the top spot is unclear.
Golden Gate could tap him for the chief executive’s role, bring in an outsider or bring back a familiar face.
Dan Artusi, a former chief executive at Conexant who was ousted a few years back, now is an operating executive at Golden Gate.
He’s believed to be a key force behind the Conexant acquisition.
Artusi is set to get a seat on Conexant’s board, according to Golden Gate.
Some company watchers don’t rule out the prospect of Artusi becoming chief executive again.
Golden Gate isn’t tipping its hand.
In a statement, the private equity firm said it looks forward to “working with (Conexant’s) management to continue developing innovative new products that better serve customer needs.”
Artusi led Conexant for about nine months until early 2008, making some drastic changes during his stint.
He brought in executives, cut some 700 jobs and stopped funding chip programs that were slow to grow or weren’t profitable.
Artusi left Conexant in what some said was a clash with Conexant’s formative former chief executive, Dwight Decker, and other directors over the pace of restructuring.
Conexant makes chips for multifunction office printers, digital picture frames, PC speakers and other devices, and has annual revenue of $200 million.
Golden Gate said it was attracted to Conexant for its steady customers and patents.
“Conexant’s blue-chip customer base and strong intellectual property portfolio provide an excellent foundation for long-term growth,” said John Knoll, managing director of Golden Gate Capital.
Golden Gate, which has some $9 billion under management, has a track record of buying chipmakers.
It’s made four other industry buys, including a buy of Irvine’s Teridian Semiconductor Corp., a maker of “smart” chips for utility meters.
It had a spectacular exit with Teridian last year, which was bought by Sunnyvale’s Maxim Integrated Products Inc. for $315 million—one of the biggest local chip buyouts to date.
Golden Gate also owns Plainview, N.Y.-based Aeroflex Corp., a maker of chips for aerospace and military uses, and Germany’s Vistec Electron Beam GMBH, which makes electron beam lithography equipment used in chip making.
The private equity firm also owns Germany’s Lantiq AG, a maker of broadband chips that spun out from Infineon Technologies AG.
With those acquisitions, Golden Gate put directors in place but otherwise left management intact.
Chittipeddi was named Conexant president in December after serving as co-president since mid-2009.
He joined the company in 2006 as senior vice president of global operations.
Chittipeddi has a background in physics and engineering and hasn’t served as a chief executive before.
Artusi
Artusi came to Conexant after two years as chief executive of Austin, Texas-based ColdWatt Inc., a maker of electronics that convert power from wall outlets for use in computers.
Before that, Artusi spent four years at Austin chip designer Silicon Laboratories Inc., including a year as chief executive.
He joined Silicon Laboratories in 2001 from what now is Freescale Semiconductor Inc., a Motorola Inc. spinoff in Austin.
For most of Artusi’s career, he was with Motorola Inc.’s chip division, serving as vice president and general manager of various units.
A native of Argentina, Artusi currently serves on the board of Santa Clara’s Atheros Communications Inc., which is being acquired by San Diego’s Qualcomm Inc.
He’s also on the board of Golden Gate acquisition Lantiq, along with four others from the private equity firm.
