IDG Capital is the most advanced bidder for the unit, which could be valued at more than $1 billion, according to Reuters. FountainVest and Triton are also involved.
The sale of ASMPT's surface-mount business is narrowing to a favorite.
IDG Capital is the most advanced bidder for ASMPT's surface-mount technology business, Reuters reported, citing three people familiar with the matter. The unit could be valued at more than $1 billion. ASMPT, which is listed in Hong Kong, is seeking about $1.5 billion, and FountainVest Partners and Triton are also engaged in the process, the report said.
None of the companies has announced an agreement, and the terms under discussion have not been disclosed.
The gap to close
The two figures in the report frame the negotiation. A valuation of "more than $1 billion" and an asking price of about $1.5 billion leave a gap of up to a third of the asking price. Whether IDG closes it, or another bidder does, will decide whether a deal is reached.
Why it matters
A sale would let ASMPT focus on its remaining businesses and turn a division into cash. For the bidders, it is a chance to buy a sizable industrial technology business carved out of a listed company.
Three sponsors still engaged at this stage suggests the asset has drawn real competition.
Two readings
One reading is that competition from three sponsors gives ASMPT leverage to push the price toward its target.
The other is that the reported valuation is well below the asking price, and that the lead bidder's position may reflect a willingness to move on terms rather than to pay up.
What to watch
Any announcement by ASMPT, the final price relative to the $1.5 billion target, and any regulatory review the buyer's identity might require.