Morgan Stanley is backing US semiconductor firm Microsemi’s acquisition of local timekeeping technologies developer Symmetricom with a US$150m loan.
The seven-year incremental term loan will be used alongside a revolver and cash on hand to finance the…
Morgan Stanley is backing US semiconductor firm Microsemi’s acquisition of local timekeeping technologies developer Symmetricom with a US$150m loan.
The seven-year incremental term loan will be used alongside a revolver and cash on hand to finance the US$230m deal, according to an SEC filing.
Terms for the debt are still being finalised, but the bank’s initial commitment letter sets out an interest rate tied to either LIBOR or a base rate. A margin of 2.5% would be added to a LIBOR-based loan, while a margin of 1.5% would be added to debt liked with a base rate.
It will amortise in quarterly instalments equal to 1% annually of the original principal amount.
Microsemi announced plans last week to acquire and merge with Symmetricom, whose synchronising products are used in satellites and other time sensitive applications, to create the largest and most complete timing portfolio in the industry.
Its US$7.18 per share cash tender offer, representing a 49% premium to the stock’s average closing price 90 days prior to the announcement, is subject to rival bids from third parties until 8 November.
Morgan Stanley also provided a fairness opinion to Microsemi, while O’Melveny & Myers is acting as its legal adviser.
Symmetricom hired Jefferies for financial advice, and Latham & Watkins as legal adviser.
Skadden, Arps, Slate, Meagher & Flom is Morgan Stanley’s legal counsel for the debt financing.
