UTAC Holdings, the Singapore-based chip tester owned by Affinity Equity Partners and TPG Capital, is considering an initial public offering, people with knowledge of the matter said.

The buyout firms are weighing a Singapore or Nasdaq listing for UTAC and have invited potential advisers to pitch for the deal, the people said, asking not to be named as the process is private.

The sale could take place around the middle of next year and proceeds would be used mainly to repay debt, they said.

UTAC, led by Chief Executive Officer John Nelson, is benefiting as chipmakers including Freescale Semiconductor and Texas Instruments Inc. increasingly outsource testing and assembly, according to a November presentation.

It employs about 12,000 people across 10 manufacturing facilities in Singapore, Thailand, Taiwan and China, the presentation shows.

“We are always looking for ways to optimize our capital structure and are considering various financing alternatives which may include accessing the public markets through an initial public offering if conditions are right,” Roger Ng, UTAC’s director of investor relations, said in an e-mailed statement.

A group of investors led by Affinity and TPG bought UTAC, then the city state’s second-largest chip tester, in 2007 for US$1.4 billion ($1.8 billion) including debt, data compiled by Bloomberg show.

The owners previously hired banks for an attempted IPO in 2011, people with knowledge of the matter said at the time.

The company agreed in February to buy three chip testing and assembly facilities from Panasonic Corp. for US$116.5 million.

Rival Stats ChipPac received a US$780 million non- binding takeover offer from Jiangsu Changjiang Electronics Technology Co., China’s biggest chip tester, in November.

The exclusive talks between the two companies expire tomorrow.