Allegro MicroSystems Announces Allocation of Increased Term Loan and Refinancing of Existing Term Loan
Allegro MicroSystems (Nasdaq: ALGM) has announced the allocation of a $400 million term loan tranche. This new loan will be used to:
- Facilitate the repurchase of shares from majority shareholder Sanken Electric Co.,
- Fully refinance Allegro's existing term loan facility
- Fund general corporate purposes
The new term loan is expected to mature on October 31, 2030, with an interest rate based on SOFR plus a 2.25% margin. This represents a 0.50% reduction compared to the existing term loan. The transaction is subject to market conditions and is not guaranteed to be completed as described.
Allegro MicroSystems (Nasdaq: ALGM) ha annunciato l'assegnazione di una tranche di prestito a termine di 400 milioni di dollari. Questo nuovo prestito sarà utilizzato per:
- Facilitare il riacquisto di azioni da parte dell'azionista di maggioranza Sanken Electric Co.,
- Rifinanziare completamente la linea di prestito a termine esistente di Allegro
- Finanziare scopi aziendali generali
Il nuovo prestito a termine dovrebbe scadere il 31 ottobre 2030, con un tasso di interesse basato su SOFR più un margine dell'2,25%. Ciò rappresenta una riduzione dello 0,50% rispetto al prestito a termine esistente. La transazione è soggetta a condizioni di mercato e non è garantito che venga completata come descritto.
Allegro MicroSystems (Nasdaq: ALGM) ha anunciado la asignación de un tramo de préstamo a plazo de 400 millones de dólares. Este nuevo préstamo se utilizará para:
- Facilitar la recompra de acciones del accionista mayoritario Sanken Electric Co.,
- Refinanciar completamente la línea de préstamo a plazo existente de Allegro
- Financiar fines corporativos generales
Se espera que el nuevo préstamo a plazo venza el 31 de octubre de 2030, con una tasa de interés basada en SOFR más un margen del 2,25%. Esto representa una reducción del 0,50% en comparación con el préstamo a plazo existente. La transacción está sujeta a las condiciones del mercado y no se garantiza que se complete como se describe.
Allegro MicroSystems (Nasdaq: ALGM)는 4억 달러 규모의 만기 대출 tranche 배정을 발표했습니다. 이 새로운 대출은 다음에 사용될 것입니다:
- 대주주인 Sanken Electric Co.의 주식 재매입을 용이하게 하기 위해,
- Allegro의 기존 만기 대출 시설을 전액 재융자하기 위해
- 일반적인 회사 목적을 위한 자금을 조달하기 위해
새로운 만기 대출은 2030년 10월 31일에 만료될 것으로 예상되며, SOFR 기준에 2.25%의 마진이 추가된 이자율이 적용됩니다. 이는 기존 만기 대출에 비해 0.50%의 감소를 의미합니다. 이 거래는 시장 상황에 따라 달라지며, 설명된 대로 완료될 것이라는 보장은 없습니다.
Allegro MicroSystems (Nasdaq: ALGM) a annoncé l'attribution d'un prêt à terme de 400 millions de dollars. Ce nouveau prêt sera utilisé pour:
- Faciliter le rachat d'actions auprès de l'actionnaire majoritaire Sanken Electric Co.,
- Refinancer entièrement la ligne de crédit à terme existante d'Allegro
- Financer des fins d'entreprise générales
Le nouveau prêt à terme devrait arriver à échéance le 31 octobre 2030, avec un taux d'intérêt basé sur le SOFR plus une marge de 2,25%. Cela représente une réduction de 0,50% par rapport au prêt à terme existant. La transaction est soumise aux conditions du marché et il n'est pas garanti qu'elle soit finalisée comme décrit.
Allegro MicroSystems (Nasdaq: ALGM) hat die Zuteilung eines 400 Millionen US-Dollar umfassenden Terminkredits bekannt gegeben. Dieser neue Kredit wird verwendet, um:
- Den Rückkauf von Aktien beim Mehrheitsaktionär Sanken Electric Co. zu erleichtern,
- Allegros bestehende Terminkreditfazilität vollständig zu refinanzieren
- Allgemeine Unternehmenszwecke zu finanzieren
Der neue Terminkredit wird voraussichtlich am 31. Oktober 2030 fällig sein, mit einem Zinssatz, der auf SOFR plus einer 2,25%-Marge basiert. Dies stellt eine 0,50%-Reduzierung im Vergleich zum bestehenden Terminkredit dar. Die Transaktion unterliegt den Marktbedingungen und es gibt keine Garantie, dass sie wie beschrieben abgeschlossen wird.
- Allocation of a substantial $400 million term loan
- Reduction in interest rate margin by 0.50% compared to existing term loan
- Extended maturity date to October 31, 2030
- Opportunity to repurchase shares from majority shareholder
- Increased debt burden with the new $400 million term loan
- Transaction completion subject to market conditions, introducing uncertainty
Insights
Allegro MicroSystems' announcement of a
- Lower Interest Costs: The new loan's interest rate, at SOFR plus
2.25% , represents a0.50% reduction compared to the existing facility. This could translate into substantial interest savings over the loan's lifetime, potentially boosting profitability. - Extended Maturity: With the new loan set to mature in October 2030, Allegro has effectively pushed out its debt obligations, providing greater financial flexibility in the medium term.
- Share Repurchase Funding: The allocation will partly fund a share repurchase from majority shareholder Sanken Electric. This could signal confidence in the company's future and may positively impact earnings per share.
However, investors should note that increasing debt levels could potentially impact the company's financial leverage and risk profile. The success of this move will largely depend on how effectively Allegro utilizes the funds and manages its capital structure going forward.
Allegro MicroSystems' refinancing move comes at an interesting time in the semiconductor industry. As a leader in power and sensing solutions, Allegro's financial maneuvers reflect broader trends:
- Industry Consolidation: The potential reduction of Sanken's ownership through share repurchases aligns with ongoing consolidation trends in the semiconductor sector. This could potentially increase Allegro's strategic flexibility.
- Investment in Growth: By securing additional funds at more favorable terms, Allegro positions itself to capitalize on growth opportunities in motion control and energy-efficient systems - areas seeing increased demand due to electrification trends in automotive and industrial markets.
- Market Perception: The involvement of major financial institutions as joint lead arrangers suggests confidence in Allegro's financial health and market position. This could positively influence investor sentiment.
While the refinancing appears strategically sound, its long-term impact will depend on market conditions, execution of growth strategies and the company's ability to maintain its competitive edge in a rapidly evolving industry landscape.
MANCHESTER, N.H., July 31, 2024 (GLOBE NEWSWIRE) -- Allegro MicroSystems, Inc. (“Allegro”) (Nasdaq: ALGM), a global leader in power and sensing solutions for motion control and energy-efficient systems, today announced the allocation of a
Morgan Stanley, Barclays, UBS, Bank of America, JPMorgan, Mizuho and SMBC are acting as joint lead arrangers and book-runners for the Term Loan.
PJT Partners is acting as financial advisor to Allegro.
About Allegro MicroSystems
Allegro MicroSystems, Inc. is a leading global designer, developer, fabless manufacturer and marketer of sensor integrated circuits (“ICs”) and application-specific analog power ICs enabling emerging technologies in the automotive and industrial markets. Allegro’s diverse product portfolio provides efficient and reliable solutions for the electrification of vehicles, automotive ADAS safety features, automation for Industry 4.0 and power-saving technologies for data centers and clean energy applications.
About Sanken
Sanken’s mission as a company is to provide optimal solutions in the broad and expansive field of electricity and electronics with semiconductors, its core business, power electronics and peripheral fields. Sanken provides products globally for the increasingly electrified automotive industry, as well as for white goods and industrial equipment, which are becoming more energy efficient as demand for electricity increases. Sanken Electric works to constantly innovate its technological capabilities and provides products of assured quality to help solve global environmental and social issues and further develop industry, the economy and culture.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding the allocation of the Term Loan, the refinancing of existing term loans and the repurchase of shares from Sanken, each as described above. These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the factors discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended March 29, 2024, filed with the SEC on May 23, 2024, and our other filings with the SEC, any of which could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change, except as required by law. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.
Contact:
Jalene Hoover
VP of Investor Relations & Corporate Communications
+1 (512) 751-6526
jhoover@allegromicro.com
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