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Welcome to “Chips on the Side: The Buy-Out of Avago Technologies” by KKR & Silver Lake, an INSEAD’s business case study. Our website will help you find suitable teaching materials, video interviews with the protagonists and easy to use de-briefing material.

Read inspection copies of the part A and part B.

 

Abstract

A consortium of private equity firms (KKR and Silver Lake Partners) is in the process of acquiring the semi-conductor division of Agilent. To prepare for the signing of the acquisition agreement and the subsequent transfer of ownership, the deal team is revisiting their investment thesis with respect to upsides and risks. Case A focuses on the operational side of the transaction, Case B deals with the implementation of an appropriate financing and capital structure.


Pedagogical Objectives

  • To explore the complexities of a typical buy-out situation from the operational side. Specifically, what are the highest impact value creation levers and biggest risks, and how to mitigate them.
  • To discuss why Agilent wanted to sell the business and why PE firms might be a better owner at the time of the transaction.
  • To develop a high-level understanding of the workings of leveraged buy-outs.
  • To discuss the risk- return relationship in PE and the interplay of financial and operational risks in the deal structuring process.
  • To understand the trade-offs involved in different debt instruments and financing structures.

 

GPEI

GPEI is INSEAD’s Centre of Excellence in Private Equity and works hand in hand with private equity firms to create relevant, timely and thought provoking output. Our research targets to enhance the productivity of the capital deployed in this asset class and to facilitate the exchange of ideas and best practices amongst limited and general partners and stakeholders involved in the industry.

 

How to buy the case

  • Hard and soft copies of the case and teaching note (which contains the login and password to access the private area of this site) can be purchased via our distributors’ websites. To choose a distributor please visit the INSEAD Case Distributors page.
  • The case can also be purchased directly from INSEAD.
  • If you are not a registered instructor, follow the instructions on our distributors’ websites to identify yourself as such.

 

 

 


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