Bank of America, one of the biggest multinational banks based in North Carolina, was hired by private equity firm Hua Capital Management Ltd to provide funding for OmniVision Technologies. The bank also acts as an advisor on the proposed acquisition on OmniVision.
Hua Capital Management Ltd is a Beijing-based private equity firm. Hua Capital manages the chip design and testing fund under the Semiconductor Industry Development Fund of the Beijing government amounting to 30 billion yuan (around $4.9 billion). The Semiconductor Fund which started last December 2013, was set up to fund China's chip industry growth.
Last August, OmniVision Technologies received an unsolicited offer from the Hua Group and is currently in discussion with the details. The company has yet to annouce the specifics of the deal, including the amount Bank of America will provide for the acquisition.
Chinese state-owned firms have previously offered to buy numerous United States listed chipmakers such as Montage Technology and RDA Microelectronics. Last year, a Beijing-based university acquired Spreadtrum Communications Inc. who is into the chip designing business which is used to connect smartphones to cellular networks. Another Chinese company, Jiangsu Changjiang Electronics Technology Co., is in discussion to purchase Stats Chippac Ltd, a Singapore-based semiconductor and assembly test company. This proposed takeover of OmniVision will be seen as an expansion of China's growth in the chip industry business.
OmniVision Technologies was co-founded by Chinese Chief Executive Officer Hong Xiaoying. The company's sales reached $1.45 billion last year. OmniVision provides camera sensors used in Apple's iPhones, one of the biggest piece of this firm's business. The company's sensors are also used in tablets and they are looking into other potential outlets such as cars.
OmniVision Technologies' stock advanced to as much as 62 percent this year, around one fourth of it can be attributed to the Hua Capital proposed takeover news.
