NXP's IPO last year disappointed, has since recovered.

Diversified chipmaker Freescale Semiconductor [FSLSM.UL], owned by a consortium of private equity firms, is close to hiring banks to underwrite its expected initial public offering, a source familiar with the situation said on Wednesday.

Austin, Texas-based Freescale was spun off from Motorola Inc MOT.N in 2004. A Blackstone Group (BX.N)-led consortium took the company private in a $17.6 billion leveraged buyout in 2006. The consortium also included Carlyle Group [CYL.UL] and TPG Capital [TPG.UL].

Freescale was mulling plans for an IPO in the summer of 2010, however, the market for chipmakers looked less healthy when rival NXP (NXPI.O) had a disappointing IPO in August, floating at $14 a share and below its intended range. It has since recovered ground and closed on Wednesday at $25.99.

Freescale has recently said it expects an IPO soon. CEO Rich Beyer said in December that he expected the company to launch an IPO in the first half of 2011. [ID:nN1477327]

Beyer said at the time that the company has not yet selected bankers to lead its stock offering, and declined to comment on the expected size of the IPO.

It was not clear which banks will be selected.

The private equity owners and Freescale either declined comment or were not immediately available for comment on Wednesday. (Additional reporting by Gabriel Madway in San Francisco; editing by Carol Bishopric)