Mercury Systems has signed an agreement with Microsemi to acquire the embedded security, RF and microwave and custom microelectronics businesses of Microsemi.

Mercury will acquire these businesses for a total purchase price of $300 million. The acquisition and associated transaction expenses are expected to be funded with a combination of committed financing for a new $265 million bank term loan A and approximately $50 million of Mercury’s cash on hand. In addition to the term loan, the financing includes a new $75 million revolving credit facility, which is not expected to be drawn at closing.

Concurrently, and in connection with entering into the purchase agreement, the company entered into a debt commitment letter with Bank of America, Citibank, KeyBank and SunTrust Bank as joint lead arrangers and as joint bookrunners, pursuant to which, the lenders have committed to provide to the company $340 million in senior secured credit facilities, comprised of (i) a term loan A facility of $265 million and (ii) a revolving credit facility of $75 million.

Bank of America acted as sole administrative agent of the senior credit facilities.

“The single transaction we’re announcing today covers all three major parts of our business and, in effect, positions Mercury as the defense industry’s largest commercial embedded secure processing company,” said Mark Aslett, president and CEO of Mercury. “The transaction adds secure solid-state storage to our array of industry-leading, pre-integrated processing subsystems capabilities. It nearly doubles the size of our RF and Microwave business, adding new capabilities, scale and synergies.”