MELBOURNE, Fla.-In keeping with its strategy to focus exclusively on the worldwide communications equipment market, Harris Corp. announced it is selling its semiconductor business to a subsidiary of Sterling Holding Co. L.L.C., a Citicorp Venture Capital Ltd. investment portfolio company.
Other investors include affiliates of Credit Suisse First Boston Corp. and certain individuals. Harris said it will retain a 10-percent ownership position in the business.
Under terms of the agreement, Harris will receive approximately $700 million in cash, notes, retained receivables and contingency payments, in addition to the equity in the business. The company said it plans to use the proceeds from the divestiture to reduce some of its debt and for general corporate purposes.
The semiconductor business, which employs more than 6,200 people in the United States and Malaysia, now will be operated as an independent company, led by Gregory L. Williams, current president of the Harris Semiconductor Sector.
Harris said it is in the process of eliminating its sector organization level and streamlining its remaining overhead structure. Upon completion of these actions, Harris will operate through five divisions, with about 11,000 employees. The company will provide equipment, systems and support services for the wireless, broadcast, government systems and network support markets.
The transaction is expected to be completed in the next two months, said Harris.
