As Hero Electronix look to sell 30% stake of its chip arm Tessolve, several PE companies express interest, eyeing growth in the expanding semiconductor sector.
Private equity (PE) firms, including Advent International and TPG Growth, are in the final stages of due diligence for a minority stake in Tessolve, the semiconductor subsidiary of Hero Electronix. Binding offers are expected soon, with Jefferies leading the advisory process.
Hero Electronix, a part of Hero Group, is looking to divest up to 30% of Tessolve, potentially raising between $120 million and $150 million. The deal could value the company at around $450 million, based on an estimated FY25 EBITDA of $20 million and a valuation multiple of 20x.
Advent and TPG are among the frontrunners, while Apax Digital and Primerica are also actively involved. Kedaara Capital and ChrysCapital have expressed interest but have not been confirmed as final contenders.
Proceeds from the stake sale will support Tessolve’s international expansion and inorganic growth. The company is targeting high-growth sectors such as artificial intelligence, automotive electronics, industrial chips, and data centres.
This follows Tessolve’s recent ₹4 billion acquisition of Germany-based Dream Chip Technologies, aimed at strengthening its foothold in Europe.
Founded in 2004 and headquartered in Bengaluru, Tessolve employs over 3000 people across 10 countries. It offers chip design, testing, production support, and embedded software services. More than 80% of the world’s top 20 semiconductor firms are part of its client base.
In FY24, Tessolve crossed ₹10 billion in revenue, recording a compound annual growth rate of around 20% and strong profitability.
The stake sale is expected to conclude in the coming weeks, bringing fresh capital to accelerate Tessolve’s global ambitions and expand its service portfolio.
