Semtech Raises $300M Via Private Debt Offering To Fund Sierra Wireless Acquisition

Semtech Corp SMTC priced $300 million of its 1.625% convertible senior notes due 2027 in a private placement.
Semtech upsized the offering from $250 million.
The initial purchasers have 13 days to purchase an additional $37.5 million aggregate principal amount of notes.
The estimated offering proceeds are $290.0 million.
Semtech expects to use $27.8 million of the proceeds to pay the cost of certain convertible note hedge transactions.
Semtech plans to finance the purchase price for Sierra Wireless, Inc SWIR, with the remainder of the proceeds together with the borrowings under the term loan facility, revolving credit facility, and available cash and equivalents.
If the acquisition does not materialize, Semtech will use the remainder of the proceeds to fund a portion of the redemption price of the notes or for general corporate purposes.
The initial conversion price of $37.27 per share represents a premium of 27.50% over Semtech's last reported sale price per share on October 6, 2022.
Semtech held $171.9 million in long-term debt and $362.2 million in cash and equivalents as of July 31.
Price Action: SMTC shares traded lower by 5.68% at $27.57 on the last check Friday.

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