How will the Microsemi acquisition be financed?

The acquisition will be financed through a combination of sources: proceeds from the $2.0 billion senior secured notes offering, borrowings under Microchip's recently amended revolving credit facility, a new term loan facility, and existing cash on hand.

Who is eligible to purchase these senior secured notes?

The notes are being offered privately to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, and to non-U.S. persons in compliance with Regulation S under the Securities Act.

Does this announcement affect Microchip's financial statements?

This announcement, made under Regulation FD, is for disclosure purposes and is not deemed to be 'filed' under Section 18 of the Securities Exchange Act of 1934, nor is it automatically incorporated into registration statements. While it details financing for an acquisition, the financial statements related to the acquisition itself would be filed separately when appropriate.

MCHP/MCHPP 8-K: Regulation FD

Q: What is the purpose of the $2.0 billion notes offering?

The primary purpose of the $2.0 billion senior secured notes offering is to finance Microchip Technology's previously announced acquisition of Microsemi Corporation. The funds will also be used to repay Microsemi's existing indebtedness and cover related transaction fees and expenses.

Summary

Microchip Technology Incorporated (MCHP) announced on May 21, 2018, its intention to offer up to $2.0 billion in aggregate principal amount of senior secured notes through a private placement. This offering is subject to market conditions and is being made to qualified institutional buyers and non-U.S. persons. The primary purpose of this debt issuance is to finance the previously announced acquisition of Microsemi Corporation. The net proceeds from the notes offering, combined with borrowings under its recently amended credit facility, a new term loan, and existing cash, will be used to complete the Microsemi acquisition, repay Microsemi's outstanding debt, and cover associated transaction costs. This move signals Microchip's commitment to closing the significant acquisition of Microsemi, which is expected to be a transformative event for the company.

Key Highlights

1Microchip Technology plans to raise up to $2.0 billion through a private placement of senior secured notes.
2The notes offering is conditional on market conditions.
3Proceeds will primarily fund the acquisition of Microsemi Corporation.
4The financing will also cover Microsemi's existing indebtedness and transaction-related expenses.
5Microchip has also entered into an Amended and Restated Credit Agreement and plans a term loan facility to support the acquisition.
6The offering is targeted at qualified institutional buyers (Rule 144A) and non-U.S. persons (Regulation S).
7This announcement is made under Regulation FD Disclosure and is not considered filed for Section 18 purposes.

MICROCHIP TECHNOLOGY INC 8-K Report, Regulation FD Disclosure (May 21, 2018)

Summary

Key Highlights

Frequently Asked Questions