MaxLinear to launch $425 million secured term loan B on Friday

By Sara Rosenberg

New York, March 30 – MaxLinear Inc. is scheduled to hold a bank meeting on Friday to launch its proposed $425 million secured covenant-light seven-year term loan B (BB-), according to a market source.

J.P. Morgan Securities LLC and Deutsche Bank Securities Inc. are the joint lead arrangers and bookrunners on the deal.

Price talk on the term loan is Libor plus 275 basis points to 300 bps with a 0.75% Libor floor and an original issue discount of 99.5, the source said.

The term loan includes 101 soft call protection for six months.

Commitments are due on April 12, the source added.

Proceeds will be used to help fund the acquisition of Exar Corp. for $13.00 per share in cash. The total value is about $700 million, or $472 million net of Exar’s cash acquired.

Other funds for the transaction will come from cash from the combined balance sheets.

Closing is expected in the second quarter, subject to regulatory approvals, a minimum tender requirement and customary conditions.

Projected last-12-months gross debt to EBITDA is 2.6 times at closing, including synergies, and 2.8 times without synergies.

MaxLinear is a Carlsbad, Calif.-based provider of integrated radio frequency and mixed-signal integrated circuits for the connected home and wired and wireless infrastructure markets. Exar is a Fremont, Calif.-based designer and developer of high performance analog mixed-signal ICs and sub-system solutions.

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