Daily News: May 30, 2018

JPMorgan Agents $6.8B Facilities to Support Microchip Microsemi Buy


Microchip Technology completed its acquisition of Microsemi in a deal valued at $10.3 billion. JPMorgan agented an amendment to the company’s credit facility that provided a revolving loan of approximately $3.8 billion and a $3 billion term loan.

The shareholders of Microsemi overwhelmingly approved the merger with 99.5% of the Microsemi shares voting in favor of it. As a result of the completion of the transaction, trading in Microsemi common stock on the NASDAQ Stock Market will cease today.

“We are very pleased to have completed our acquisition of Microsemi,” said Steve Sanghi, CEO. “I welcome the Microsemi employees into the Microchip family and look forward to working together to realize the benefits of a combined team pursuing a unified strategy.”

Microchip financed the transaction with cash from the combined company balance sheets, borrowings from Microchip’s existing line of credit, $3 billion from a new term loan and $2 billion from newly issued high-grade secured bonds. Microsemi’s previously outstanding debt was retired in conjunction with the closing of the transaction.

According to a related 8-K filing, JPMorgan served as administrative agent for the credit facility. JPMorgan Chase, Wells Fargo Securities, Merrill Lynch, HSBC Securities, BMO Capital Markets, U.S. Bank, SunTrust Robinson Humphrey, MUFG Bank, Fifth Third Bank, Royal Bank Of Canada, UBS Bank, Mizuho Bank, BNP Paribas Securities and The Bank Of Nova Scotia were joint lead arrangers and joint bookrunners.

The amended facility provided a revolving loan facility in an aggregate principal amount of approximately $3.8 billion, with a $250 million foreign currency sublimit, a $50 million letter of credit sublimit and a $25 million swingline loan sublimit. The revolving loan facility consists of approximately $244.3 million of revolving loan commitments that terminate on February 4, 2020 and approximately $3.6 billion of revolving loan commitments that terminate on May 18, 2023.

The amended facility provided a $3 billion term loan facility. Upon the closing of the amended credit agreement, the company had $3.453 billion of revolving loans outstanding and $3 billion of term loans outstanding, the proceeds of which were used to finance the company’s acquisition of Microsemi.

The amended agreement permits the company to add one or more incremental term loan facilities and/or increase the commitments under the revolving loan facility from time to time, subject, in each case, to the receipt of additional commitments from existing and/or new lenders and pro forma compliance with a consolidated senior leverage ratio set forth in the amended agreement.