SINGAPORE-Flextronics International Ltd. said it was selling off its software development and solutions business to Kohlberg Kravis Roberts & Co. for approximately $900 million.
Flextronics said the sale continues its strategy to focus on boosting growth in its core electronic manufacturing services business, including design, vertically integrated manufacturing services, components and logistics.
“By monetizing non-core assets at substantial gains over carrying values, Flextronics will have generated cash proceeds in excess of $1 billion through the divestitures of our software, network services and semiconductor businesses, assuming the transaction is consummated,” stated Michael McNamara, chief executive officer at Flextronics.
Visiongain recently predicted that outsourced handset manufacturing will account for more than one-third of total handset shipments in 2006 and rise in three years to nearly half of all phones shipped. Flextronics, the top contract manufacturer, produced 47 million handsets last year, just behind the world’s fourth-largest vendor, LG Electronics Co. Ltd., and ahead of Sony Ericsson Mobile Communications L.P.
Flextronics said it plans to retain a 15-percent equity stake in the business, which would operate as an independent software development and solutions company.
