Microchip secures commitments from JPMorgan for Microsemi acquisition

By Tali Rackner

Minneapolis, March 2 – Microchip Technology Inc. obtained commits from JPMorgan Chase Bank, NA for an up to $5 billion senior secured term loan facility and an up to $625 million 364-day senior secured bridge term loan facility, according to an 8-K filing with the Securities and Exchange Commission.

The facilities will be used, along with about $1.6 billion of cash and about $3 billion from the company’s existing line of credit, to finance its acquisition of Microsemi Corp.

If the lenders party to Microchip’s existing revolving credit facility do not consent to certain amendments the revolver to allow the merger and related financing transactions, JPMorgan also committed to provide an up to $3,122,000,000 senior secured revolving credit facility to replace the existing revolving credit facility.

If Microchip obtains the specified amendments to its existing revolver to allow the merger and related financing transactions, the company said it intends to draw on the facility for a portion of its funding needs for the merger.

The funding of the credit facilities provided for in the commitment letter is contingent on the satisfaction of customary conditions and the consummation of the merger.

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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