Radio-frequency semiconductor specialist Aeroflex Holding is set to raise a total of US$265m from its NYSE listing after the underwriters exercised their over-allotment option to purchase an additional US$34.3m worth of shares.
Aeroflex, which develops…
Radio-frequency semiconductor specialist Aeroflex Holding is set to raise a total of US$265m from its NYSE listing after the underwriters exercised their over-allotment option to purchase an additional US$34.3m worth of shares.
Aeroflex, which develops microwave integrated circuits for commercial satellites, raised approximately US$232.2m from its IPO, selling 17.3 million shares at US$13.50 per share. Goldman Sachs, Credit Suisse, JP Morgan and Morgan Stanley were lead bookrunners for the offering, with Barclays Capital, Stifel Nicolaus Weisel, UBS, Moelis & Co, Needham & Co and Oppenheimer & Co serving as co-managers.
Despite pricing at the low end of its US$13.50 – US$15.50 per share range, Aeroflex’s private equity owners, Veritas, Golden Gate Capital and Goldman Sachs, succeeded in getting a similar valuation to the US$1.1bn they paid for Aeroflex in 2007. That transaction was financed through a US$525m debt facility.
Following completion of the over-allotment purchase, Aeroflex’s existing private equity shareholders will own a 76.6% holding in the company with the remainder held by new investors.
The majority of proceeds from the IPO are to be used to pay down some of Aeroflex’s debt, the bulk of which came from the 2007 LBO. At the beginning of November, the company launched a tender offer to purchase a portion of its US$225m outstanding of 11.75% senior notes due February 2015 and a loan buy back process for the US$168m outstanding under its 11.75% senior subordinated unsecured term loans also due 2015. It is seeking to buy both back at between 107% and 111% of their face value.
Aeroflex stated that it would spend up to US$187.25m repurchasing its debt and by the end of the early participation period on 22 November, US$32.15m of the senior notes and US$128.35m of the term loan were validly tendered. The buyback offer expires on 6 December.
Of the remainder of the proceeds from the IPO, US$16.9m will be paid to the sponsors as a termination fee connected to an advisory agreement with Aeroflex, US$3.9m paid to its lenders in exchange for an amendment to its senior secured credit facility and US$1m for general corporate purposes.
Having remained relatively robust during the global economic downturn, Aeroflex’s private equity owners have sought to gain scale during the subsequent recovery with a number of bolt-on acquisitions. In May, the company snapped up the operating assets of Willtek Communications, a German wireless test and measurement solutions firm, for US$2.75m. It quickly followed this in June with the purchase of Radiation Assured Devices, a developer of radiation hardened products for commercial and military spaceborne electronics. Aeroflex also announced in June its intention to buy microwave receiving components manufacturer Advanced Control Components for US$20m, completing the deal at the beginning of September.
