Arranged Marriage May Be Next for Freescale

Private equity firms are notorious for maximizing profits by slicing and dicing the companies they acquire.

But a flurry of private equity activity in the semiconductor industry has some analysts wondering whether the opposite scenario is in the offing.

Freescale Semiconductor(FSL Quote) said in a statement Monday that it is in "discussions with parties relating to a possible business transaction."

According to a report in The New York Times, that business transaction is actually a $16 billion buyout offer from the Texas Pacific Group, the Blackstone group, Permira and the Carlyle Group.

Meanwhile, Kohlberg Kravis Roberts and Silver Lake Partners have reportedly put a rival offer on the table.

Given that the latter group just announced the buyout in August of Philips Semiconductor, recently renamed NXP, it didn't take long for matchmaking speculation to run rampant.

"On the face of it, it seems like a pretty good guess," says Thomson Financial editor-at-large, Dan Primack, about KKR's rumored intention to combine Freescale and NXP. He says that private equity firms have increasingly engaged in so-called platform roll-up deals, in which the firms continue adding to an acquired company, rather than breaking it apart.

After all, Primack says, KKR would not likely want to have two companies in its investment portfolio competing against each other. "You don't want one company to succeed at the expense of the other," Primack says.