Microchip launches $2 billion term loan B at Libor plus 200-225 bps

By Sara Rosenberg

New York, May 3 – Microchip Technology Inc. launched a $2 billion seven-year term loan B (//BBB-) that is talked at Libor plus 200 basis points to 225 bps with a 0% Libor floor and an original issue discount of 99.75, according to a market source.

The term loan has 101 soft call protection for six months, the source said.

J.P. Morgan Securities LLC is the lead bank on the deal.

Commitments are due on May 16, the source added.

Proceeds will be used to help fund the acquisition of Microsemi Corp. for $68.78 per share in cash. The acquisition price represents a total equity value of about $8.35 billion, and a total enterprise value of about $10.15 billion, after accounting for Microsemi’s cash and investments, net of debt, on its balance sheet at Dec. 31, 2017.

Microchip is a Chandler, Ariz.-based manufacturer of microcontroller, memory and analog semiconductors. Microsemi is an Aliso Viejo, Calif.-based provider of semiconductor solutions.

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