Summary
Teradyne, Inc. (TER) has filed an 8-K report detailing two significant events on November 14, 2008: the completion of its acquisition of Eagle Test Systems, Inc. and the entry into a new credit agreement. The acquisition of Eagle Test was finalized for approximately $250 million in cash, net of cash acquired. This strategic move aims to expand Teradyne's capabilities in the semiconductor test market.
Key Highlights
- 1Completed the acquisition of Eagle Test Systems, Inc. for approximately $250 million in cash.
- 2Entered into a $122.5 million senior secured revolving credit facility.
- 3Borrowed $100 million under the new credit facility on the closing date.
- 4Proceeds from the credit facility and cash on hand will finance the Eagle Test acquisition, working capital, and general corporate purposes.
- 5The credit facility has a maturity date of November 14, 2011.
- 6Interest rates on the credit facility are based on Eurodollar Rate or Base Rate plus a margin, varying with Teradyne's Consolidated Leverage Ratio.
- 7The credit facility includes customary representations, warranties, affirmative and negative covenants, and events of default.
Frequently Asked Questions
The new $122.5 million senior secured revolving credit facility was established to help finance the acquisition of Eagle Test Systems, Inc. It will also be used for working capital needs and general corporate purposes.
Teradyne paid approximately $250 million in cash for Eagle Test Systems, Inc., net of cash acquired and including estimated transaction costs and the fair value of employee equity instruments.
The revolving credit facility is available until November 14, 2011.
The credit agreement requires Teradyne to maintain certain financial ratios, including a leverage ratio, fixed charge coverage ratio, and an available domestic cash to total revolving borrowings ratio, calculated as of the end of each fiscal quarter.