NXP's initial public offering (IPO news) didn't exactly wow the market. So what does that mean for Freescale? It was purchased in 2006 by Blackstone Group (Blackstone Group news) and other private equity firms, and like NXP, it has been struggling ever since with high debt levels. Now, many assume Freescale will follow NXP and attempt an IPO. 

"Both are hard-luck cases," notes TheDeal. "Acquired in 2006 megadeals (NXP for $10.4 billion, ­Freescale for $17.6 billion) for sky-high cash flow multiples and freighted with debt, they suffered staggering losses in 2008 and 2009. As the value of their sponsors' equity investments approached the vanishing point, they emerged as poster children for the outsized, overleveraged and ill-conceived deals that marked the apex of the 2005-2007 LBO boom."

Let's not hold back! What's driving all this now is not the need  for paper profits, which other sponsor-backed IPOs have racked up, but the need to pay down massive debts. If the markets cooperate we may indeed see a slew of IPOs that are similarly aimed at paring down debt levels. A surge in buyout debt payment obligations looms large for the 2012-2014 period. So there is some urgency.

For more:
- here's the article from TheDeal
- here's a Breakingviews article

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