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CLIENT CASE STUDY

Carve out for competitive agility

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OVERVIEW

NXP Semiconductors (NXP) is driving innovation in the secure connected vehicle, end-to-end security & privacy and smart connected solutions markets. Built on more than 60 years of combined experience and expertise, the company has 31,000 employees in more than 33 countries and posted revenue of $9.5 billion in 2016.

To grow in the highly competitive semiconductor sector, NXP wanted to focus on high-growth market segments that required High Performance Mixed Signal (HPMS) products. That meant divesting its Standard Products business, a transaction valued at $2.75B.

NXP asked Accenture Strategy to help plan and manage the carve-out. Several factors influenced NXP’s decision to team with Accenture Strategy, including its responsive and collaborative approach, experience in divestitures, and deep industry knowledge of the semiconductor industry.

Accenture Strategy quickly deployed a global team of carve-out specialists to help plan and execute the divestiture over a period of just seven months.

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“Our relationship with Accenture Strategy was high impact. The team’s divesture strategy, seamless implementation and collaborative approach is a text book example of how the power of a strong partnership can drive great outcomes for a client.”

DAN DURN

Executive Vice President and CFO, NXP

OPPORTUNITY

As part of its growth strategy, NXP wanted to sell its Standard Products business, which makes components for the Discretes, Logic and Metal-Oxide Semiconductor Field-Effect Transistors (MOSFETs) markets. By doing so, NXP could focus on high-growth market segments that require High Performance Mixed Signal (HPMS) products for use in everything from smart meters to connected cars.

NXP knew that divesting the Standard Products business would be an important but complex undertaking. Complicating matters was the fact that NXP was also in the process of integrating its recent merger of Freescale Semiconductor.

NXP asked Accenture Strategy to help plan and manage the carve-out. Several factors influenced NXP’s decision to team with Accenture Strategy, including its responsive and collaborative approach, experience in divestitures, and deep industry knowledge of the semiconductor industry.

OUTCOMES

With Accenture Strategy’s help—and in just seven months—NXP successfully divested its Standard Products business, which was “customer facing” on Day 1 and now exists as a standalone company named Nexperia. By having Accenture Strategy manage the carve-out, NXP was able to focus on integrating its Freescale Semiconductor merger and on higher-value HPMS markets.

The success of the divestiture program was largely due to the collaboration between Accenture Strategy and NXP from the very start. Accenture Strategy worked as an extension of NXP’s Integration Management Office and teamed closely with NXP’s global business functions. Together, these groups:

  • Created cut-over plans, conducted business process simulations and readiness checks, and established a Cutover Command Center to support all affected functions and countries during the transition

  • Developed and executed the Day 1 customer-readiness strategy, which enabled NXP to transition more than 800 customers and 600 suppliers to the newly divested company

  • Scoped, priced and assessed the readiness of 50+ Transactional Service Agreements (TSAs) between NXP and the newly formed company

With the Freescale merger and the divestiture of Nexperia, NXP created strong growth potential for the company—attracting the attention of Qualcomm. Qualcomm announced its intention to acquire NXP in October 2016 in a deal valued at $47 billion. The acquisition is expected to be completed in the fourth quarter of 2017.

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