Austrian chip firm chooses Swiss exchange

Austrian chip manufacturer, austriamicrosystems, has announced its intention to list on the SWX Swiss Exchange in Zurich.

The move follows the successful initial public offering (IPO) of the biotechnology company Basilea Pharmaceutica, which floated its shares last month on the exchange.

The Unterpremstätten-based firm is planning an €85 million (SFr122 million) public offering of primary and secondary shares in Switzerland, along with private placement for investors abroad.

austriamicrosystems is majority owned by a London-based private equity company, Permira Advisors Ltd, which acquired the shares in 2000 when the firm’s share price was at a low point.

It had been traded on the Vienna Stock Exchange since 1993. Permira took it private and has been working with the firm to improve its balance sheet and better position it in the industry.

Debt repayments

The Permira partner responsible for the deal, Evelyn Ehlert, of Permira Beteiligungsberatung in Frankfurt, is not yet saying how much of its holding it will retain after the flotation.

The capital will be used repay approximately €55 million of long-term debt (Dow Jones reports the firm has a total debt of €125 million), as well as give the firm a stronger capital base. In addition, an IPO will raise its “visibility” among customers, according to CEO, John Heugle.

The Austrian chipmaker supplies chips to a large number of electronics manufacturers around the world.

Its chips are used in everything from electronic toothbrushes and automotive information systems to wireless pulse monitors. It recently boosted its sales capacity in the Far East and built a new factory near Graz. Turnover in 2003 was €134 million.

Familiar investors

austriamicrosystems will be the second Austrian company in the semiconductor sector to list on the SWX.

ISEZ Holding Ltd, a capital equipment supplier to the semiconductor industry, has been listed here since 1996. It raised SFr112 million in a secondary offering on the Zurich exchange last week.

Other semiconductor firms listed on SWX include Micronas Semiconductor Holding and Unaxis Holding.

“Swiss investors are more familiar with high tech investing and there is a broader client base here,” commented Urs Eberhard, an analyst at Zurich-based MicroValue, an investment firm with holdings in a number of publicly traded Swiss, Korean, and Taiwanese semiconductor firms.

Analysts are still forming their opinion on the little-known Austrian chip company.

“A lot of companies in the sector are raising new capital,” commented Stephan Gachter, a semiconductor analyst with Zurcher Kantonalbank in Zurich, suggesting that the chip sector is at, or near, a peak in demand, which is driving the trend in capital raising.

The chip sector is known for the dramatic ups and downs of its business cycle.

Valerie Thompson