Summary
Advanced Micro Devices, Inc. (AMD) has filed an 8-K report detailing an amendment to a Master Transaction Agreement with Advanced Technology Investment Company LLC (ATIC) and West Coast Hitech L.P. (WCH), originally established on December 5, 2008. The amendment significantly alters the terms of the initial agreement, particularly concerning the sale of AMD's common stock and warrants to WCH, as well as the enterprise valuation and capital call multiples for The Foundry Company. These changes suggest a renegotiation of the financial structure of their partnership, likely in response to prevailing market conditions at the time. The most significant adjustments include a revised purchase price mechanism for WCH's acquisition of AMD shares and warrants, a reduction in the enterprise value multiplier for manufacturing assets contributed to The Foundry Company, and a lower valuation multiple for future capital calls. Following the closing of these transactions, AMD and ATIC will be the sole shareholders of The Foundry Company, with AMD holding a 34.2% stake and ATIC (through Oyster) holding 65.8% on a fully converted basis, both having equal voting rights.
Key Highlights
- 1AMD amended its Master Transaction Agreement with ATIC and WCH on December 5, 2008.
- 2WCH will purchase 58,000,000 shares of AMD common stock and 35,000,000 warrants.
- 3The purchase price for WCH's stake is tied to the average closing prices of AMD stock in the 20 trading days prior to December 12, 2008, or the closing date.
- 4The enterprise value of assets contributed to The Foundry Company has been reduced from 1.13x to 0.85x of net book value.
- 5Future capital calls for The Foundry Company will be valued at a reduced multiple of 0.9x, down from 1.1x.
- 6Post-closing, The Foundry Company will be owned by AMD (34.2%) and ATIC (65.8%) on a fully converted basis, with equal voting rights.
- 7The company announced these amendments via a press release on December 8, 2008.