Firms & Funds

KKR ups stake in chipmaker Marvell Technology

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Stuart Gulliver (L), group chief executive of HSBC Holding, accompanied by Sehat Sutardja, president and chief executive of Marvell Technology Group, USA, speaks in a closing plenary on Responding to the New Globalism at the World Economic Forum in Jakarta June 13, 2011. REUTERS/Enny Nuraheni (INDONESIA - Tags: BUSINESS) - RTR2NM8E
  • FTC clears investment by KKR
  • KKR, Marvell stay quiet
  • KKR initially invested in Marvell in 2014

Kohlberg Kravis Roberts received approval from regulators to increase its stake in Marvell Technology at a time when the chipmaker is searching for a new chief executive and facing pressure from an activist investor.

The Federal Trade Commission cleared the transaction, according to an April 21 filing.

The exact amount of KKR’s investment in Marvell wasn’t disclosed. Federal regulators typically review any investment valued at more than $78.2 million, according to U.S. law.

A spokeswoman from KKR did not comment and Marvell did not respond to a request for comment.

At last check, Marvell had a market cap of about $5.3 billion.

In late 2013, KKR reported it had taken a 6.8 percent stake in the company. Marvell said in early 2014 that it was not in talks with KKR about a buyout or other major transaction.

In February of this year, activist investor Jeffrey Smith of Starboard Value took a 7 percent stake in the company. At the time, sources told Reuters that Smith wanted Marvell to cut costs and exit its mobile-wireless business.

Starboard did not respond to requests for comment.

On April 5, Marvell said co-founders Sehat Sutardja and Weili Dai left their positions as CEO and president respectively, but will remain on the board. Sutardja is continuing as chairman. The company is searching for a new CEO.

The company also said an independent review of its books revealed “certain accounting and internal control matters” and that it’s working to complete the preparation and filing of its annual report for fiscal 2016.

A year ago, Marvell shares traded at about $14, but fell under $10 in September. The company faced several challenges, including declining sales, an SEC investigation, a patent lawsuit and the departure of its independent auditor.

Action Item: See Marvell Technology SEC filings: http://1.usa.gov/1SVQ8iT

Photo: Sehat Sutardja (R) co-founder of Marvell Technology Group, appears at the World Economic Forum in Jakarta June 13, 2011. REUTERS/Enny Nuraheni