Schwarzman Celebrates Birthday with Human Sacrifice

A consortium of private equity shops led by Blackstone Group outbid KKR to purchase Freescale Semiconductor in 2006, making history in completing the largest technology buyout of all time. Way to go, guys:

The group hoped to grow the company, which had been spun off from Motorola in 2004, in part through acquisitions. Yet ever since, Freescale has struggled, in part because Motorola (MOT)—which is having its own problems—remains one of its biggest customers. Some of the company's bonds recently traded for as little as 68¢ on the dollar, according to bond watcher MarketAxess. Business Week

Hopefully the next time Steve & Co. decide to spend nearly $18 billion they will pay more attention to customer concentration issues. You are only as good as your biggest customer.

Richard Beyer, the former head of Intersil and newly appointed Freescale CEO, is going to have his hands full with an implosion at his number one account. How is he going to spin it?

I don't think we want to escape from having a customer as powerful as Motorola. What we have to do is build on it. In all areas that we do business with Motorola, it behooves us to have other customers and partners. But I would have killed at Intersil to have anything like the kind of relationship that Freescale has. I'm not looking to abandon that relationship or weaken it. (I want) to strengthen the relationship (with) Motorola and with other customers. Beyer Interview with Business Week

Perhaps the ex-CEO was loathe to cut the research and development budget, and in turn lost his head . But chopping R&D could go a long way toward servicing a mountain of debt.

Lopping off the head of Michel Mayer, Freescale’s former CEO, is a questionable birthday present, but it might take Schwarzman’s mind off his stock, which came within 6 cents of all-time low on Wednesday.

Good luck, Richard Beyer, in your new job at Freescale. And don’t forget to send your new boss a birthday present. Just don’t expense it; that would not sit well with bondholders.

Oh, we almost forgot.

Happy Birthday, Steve.

Blackstone frees up Freescale chief
Fortune

Q&A with Freescale’s New CEO
Business Week
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