8-KLeadership ChangesAcquisitions & DispositionsMaterial Agreements+4

ANALOG DEVICES INC 8-K Report, Material Agreement (Mar 10, 2017)

Filed March 10, 2017For Securities:ADI

Summary

Analog Devices, Inc. (ADI) filed an 8-K on March 10, 2017, announcing the completion of its acquisition of Linear Technology Corporation (Linear) for a total consideration of approximately $15.7 billion. This significant transaction was primarily funded through a combination of cash on hand, senior unsecured notes, and newly established debt facilities, including a $4.1 billion bridge credit facility and an increased $1 billion revolving credit facility. The filing also details the appointment of a new director, Robert H. Swanson, Jr., and updates on executive incentive plan adjustments related to the merger. Investors should note that the financial statements and pro forma information related to the acquisition will be filed by amendment later.

Key Highlights

  • 1Completion of the acquisition of Linear Technology Corporation for approximately $15.7 billion (cash and stock).
  • 2Establishment of a $4.1 billion unsecured bridge credit facility to help fund the merger, with a maturity of June 8, 2017.
  • 3Increase in the aggregate commitments under the revolving credit facility from $750 million to $1 billion.
  • 4Election of Robert H. Swanson, Jr. to the Board of Directors.
  • 5Executive Performance Incentive Plan adjusted to exclude Linear's financial results for the remainder of fiscal 2017.
  • 6ADI provided updated financial guidance for the second fiscal quarter of 2017.
  • 7Financial statements and pro forma information for the acquired business to be filed via amendment.

Frequently Asked Questions

The main purpose of this 8-K filing was to report the completion of Analog Devices, Inc.'s (ADI) acquisition of Linear Technology Corporation (Linear) on March 10, 2017, and to disclose related financing and corporate actions.

The acquisition was funded through a combination of ADI's cash on hand, the net proceeds from the issuance and sale of senior unsecured notes, and funds from short- and long-term indebtedness. This included the establishment of a $4.1 billion bridge credit facility and the utilization of existing credit facilities.

The bridge credit facility provides for unsecured loans up to an aggregate principal amount of $4.1 billion. Loans can be Eurodollar Rate Loans or Base Rate Loans, with interest rates depending on the Company's Debt Ratings. Repayments are due no later than June 8, 2017, and the agreement contains customary covenants but no financial covenants.

Yes, the aggregate commitments under the revolving credit facility were increased from $750 million to $1 billion. Additionally, modifications were made to the funded debt to EBITDA ratio calculation and other technical amendments were implemented to align with existing term loan provisions.