Moody’s affirms Lam Research

Moody's Investors Service said it affirmed Lam Research Corp.’s Baa1 senior unsecured rating following the Oct. 21 announcement that it signed a definitive agreement to acquire KLA-Tencor Corp. for $10.6 billion.

Both boards of directors have approved the transaction, and subject to KLA's shareholder vote and customary regulatory and closing conditions, Lam Research expects the acquisition to close in the first half of calendar year 2016.

The outlook remains stable.

In addition to roughly $5.6 billion of new equity, Lam Research plans to fund the acquisition using about $1.9 billion of cash on hand from the combined companies and approximately $3.9 billion in debt financing.

Moody's projects adjusted gross debt to EBITDA of about 3.7 times at closing around June 2016. Through debt reduction and EBITDA growth, the agency expects Lam Research's leverage to decline to 2.7 times by calendar 2017 and below 2.5 times by 2018.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.