Flextronics has sold its software development arm to private equity group Kohlberg Kravis and Roberts for $900m in cash and shares.
KKR will pay $600m in cash and a $250m "face value note with a 10.5 per cent paid-in-kind interest coupon". Flextronics will keep a 15 per cent stake in the firm.
Michael McNamara, CEO at Flextronics, said the deal continued the firm's strategy of focussing on design, vertically-integrated manufacturing services, components and logisitics. It has raised over $1bn selling its chip, networking and software businesses. Flextronics turned over $15.9bn in 2005 offering design services to car makers, engineering firms and technology and other manufacturers.
The deal is expected to close this summer, subject to the usual regulatory approvals.
In other news the Flextronic board has approved a share buy-back scheme of up to $250m.
More from Flextronics' website here.®