Allegro MicroSystems, Inc. Enters Its Next Phase as a Public Company with Repurchase of 39 Million Shares Held by Sanken Electric
Allegro MicroSystems (Nasdaq: ALGM) has completed the first of two share repurchases from its largest shareholder, Sanken Electric. The company is buying back a total of 39 million shares at $23.16 per share. The first repurchase of 29 million shares was financed by issuing new stock for $666 million. The second repurchase of 10 million shares will be financed through a term loan and cash on hand.
This move will reduce Sanken's ownership in Allegro from 50.8% to 32.5%. Sanken has agreed to a 14-month lock-up period. The companies have also amended their Stockholders Agreement, adjusting Sanken's board representation rights based on ownership levels. Allegro's CEO, Vineet Nargolwala, stated that this buyback will lead to broader ownership, increased liquidity, and improved governance.
Allegro MicroSystems (Nasdaq: ALGM) ha completato il primo dei due riacquisti di azioni dal suo principale azionista, Sanken Electric. L'azienda sta riacquistando un totale di 39 milioni di azioni a $23.16 per azione. Il primo riacquisto di 29 milioni di azioni è stato finanziato emettendo nuove azioni per un totale di $666 milioni. Il secondo riacquisto di 10 milioni di azioni sarà finanziato tramite un prestito a lungo termine e liquidità disponibile.
Questa mossa ridurrà la partecipazione di Sanken in Allegro dal 50.8% al 32.5%. Sanken ha accettato un periodo di lock-up di 14 mesi. Le aziende hanno anche modificato il loro Accordo tra Azionisti, adeguando i diritti di rappresentanza nel consiglio di Sanken in base ai livelli di partecipazione. Il CEO di Allegro, Vineet Nargolwala, ha affermato che questo riacquisto porterà a una maggiore partecipazione, una maggiore liquidità e una governance migliorata.
Allegro MicroSystems (Nasdaq: ALGM) ha completado la primera de dos recompra de acciones a su mayor accionista, Sanken Electric. La empresa está recomprando un total de 39 millones de acciones a $23.16 por acción. La primera recompra de 29 millones de acciones fue financiada emitiendo nuevas acciones por un valor de $666 millones. La segunda recompra de 10 millones de acciones se financiará a través de un préstamo a plazo y efectivo disponible.
Este movimiento reducirá la participación de Sanken en Allegro del 50.8% al 32.5%. Sanken ha aceptado un período de bloqueo de 14 meses. Las empresas también han modificado su Acuerdo de Accionistas, ajustando los derechos de representación de Sanken en la junta en función de los niveles de propiedad. El CEO de Allegro, Vineet Nargolwala, declaró que esta recompra llevará a una mayor propiedad, mayor liquidez y una mejor gobernanza.
알레그로 마이크로시스템즈(Nasdaq: ALGM)는 최대 주주인 산켄 전기(Sanken Electric)로부터 두 번의 자사주 매입 중 첫 번째를 완료했습니다. 회사는 총 3900만 주를 주당 $23.16에 다시 사들이고 있습니다. 2900만 주의 첫 번째 매입은 6억 6600만 달러에 해당하는 신규 주식 발행으로 자금을 조달했습니다. 1000만 주의 두 번째 매입은 기간 대출과 현금을 통해 조달할 예정입니다.
이번 조치로 산켄의 알레그로 지분은 50.8%에서 32.5%로 감소하게 됩니다. 산켄은 14개월의 잠금 기간에 동의했습니다. 두 회사는 또한 주주 계약을 수정하여 산켄의 이사회 구성 권한을 소유 수준에 따라 조정했습니다. 알레그로의 CEO인 빈짓 나르고왈라(Vineet Nargolwala)는 이번 자사주 매입이 더 넓은 소유, 증가된 유동성, 그리고 개선된 거버넌스로 이어질 것이라고 밝혔습니다.
Allegro MicroSystems (Nasdaq: ALGM) a terminé le premier de deux rachats d'actions auprès de son plus grand actionnaire, Sanken Electric. L'entreprise rachète un total de 39 millions d'actions au prix de 23,16 $ par action. Le premier rachat de 29 millions d'actions a été financé par l'émission de nouvelles actions pour un montant de 666 millions de dollars. Le second rachat de 10 millions d'actions sera financé par un prêt à terme et des liquidités disponibles.
Cette opération réduira la participation de Sanken dans Allegro de 50,8 % à 32,5 %. Sanken a accepté une période de blocage de 14 mois. Les entreprises ont également modifié leur Accord des actionnaires, ajustant les droits de représentation de Sanken au conseil d'administration en fonction des niveaux de propriété. Le PDG d'Allegro, Vineet Nargolwala, a déclaré que ce rachat conduira à une plus large propriété, une plus grande liquidité et une meilleure gouvernance.
Allegro MicroSystems (Nasdaq: ALGM) hat den ersten von zwei Aktienrückkäufen von seinem größten Aktionär Sanken Electric abgeschlossen. Das Unternehmen kauft insgesamt 39 Millionen Aktien zu einem Preis von 23,16 $ pro Aktie zurück. Der erste Rückkauf von 29 Millionen Aktien wurde durch die Ausgabe neuer Aktien im Wert von 666 Millionen $ finanziert. Der zweite Rückkauf von 10 Millionen Aktien wird durch ein Term Darlehen und vorhandenes Bargeld finanziert.
Diese Maßnahme wird Sankens Eigentum an Allegro von 50,8 % auf 32,5 % reduzieren. Sanken hat einer Sperrfrist von 14 Monaten zugestimmt. Die Unternehmen haben auch ihre Aktionärsvereinbarung geändert und Sankens Vertretungsrechte im Vorstand basierend auf den Eigentumsverhältnissen angepasst. Der CEO von Allegro, Vineet Nargolwala, erklärte, dass dieser Rückkauf zu einer breiteren Eigentümerschaft, einer höheren Liquidität und einer verbesserten Unternehmensführung führen werde.
- Reduction of largest shareholder's stake from 50.8% to 32.5%, potentially improving stock liquidity
- Successful completion of $666 million share offering to finance first repurchase
- 14-month lock-up agreement with Sanken, providing stability in ownership structure
- Amended Stockholders Agreement reducing Sanken's board influence as ownership decreases
- Potential dilution from issuing 29 million new shares for the first repurchase
- Increased debt load due to incremental term loan for second repurchase
- Reduction in cash reserves to partially finance the second repurchase
Insights
The repurchase of 39 million shares from Sanken Electric marks a significant shift in Allegro MicroSystems' ownership structure and corporate governance. This move is strategically important for several reasons:
- Increased public float and liquidity: The reduction of Sanken's stake from
50.8% to32.5% will substantially increase the number of freely tradable shares, potentially attracting more institutional investors and improving trading volumes. - Improved governance: The amended stockholders agreement ties Sanken's board representation to its ownership levels, enhancing Allegro's independence and aligning with best practices in corporate governance.
- Financial implications: The use of a
$666 million equity offering to finance part of the repurchase demonstrates market confidence in Allegro's value proposition. The additional debt for the remaining shares could impact the company's financial flexibility, but also indicates management's confidence in future cash flows.
While the
This transaction signifies a pivotal moment for Allegro MicroSystems in the semiconductor industry landscape. Here's why it matters:
- Market positioning: As a leader in power and sensing solutions, Allegro's increased independence could enhance its ability to pursue strategic partnerships and acquisitions, potentially strengthening its competitive position.
- Investor appeal: The broader ownership structure and improved liquidity may attract a more diverse investor base, including those focused on governance quality and float size.
- Industry trends: This move aligns with a broader trend in the semiconductor industry where companies are seeking more independence from traditional parent companies or major shareholders to increase agility in a rapidly evolving market.
The timing of this transaction is noteworthy, coming amidst a period of high demand for semiconductors in automotive and industrial applications – Allegro's key markets. The company's ability to execute this significant ownership change suggests confidence in its market position and growth prospects. Investors should watch for any shifts in Allegro's strategic focus or R&D investments post-transaction, as these could indicate new growth vectors or market opportunities being pursued with the company's newfound independence.
The legal implications of Allegro MicroSystems' share repurchase and governance changes are significant:
- Stockholders Agreement: The amended agreement introduces a sliding scale for Sanken's board representation, tying it directly to ownership levels. This is a best practice in corporate governance, ensuring proportional representation and potentially reducing conflicts of interest.
- Lock-up Period: The 14-month lock-up agreement with Sanken provides stability and prevents immediate market disruption. It also signals confidence in Allegro's long-term prospects.
- Regulatory Considerations: The transaction likely required careful structuring to comply with securities laws, particularly given the size of the repurchase and the public offering component.
The reduction of Sanken's ownership below
MANCHESTER, N.H., July 29, 2024 (GLOBE NEWSWIRE) -- Allegro MicroSystems, Inc. (Nasdaq: ALGM) (“Allegro”), a global leader in power and sensing solutions for motion control and energy-efficient systems, announced today that it has completed the closing of the first of two repurchases for a total of 39 million shares of common stock from Allegro’s largest shareholder, Sanken Electric Co., Ltd. (“Sanken”), all of which will be retired.
The closing of the first repurchase was financed by issuing approximately 29 million shares of common stock for
“This share buyback and retirement represent another important milestone in Allegro’s journey as a public company. We believe that broader ownership, increased liquidity and improved governance will act as a catalyst for further value creation,” said Vineet Nargolwala, President and CEO.
Pursuant to the terms of the Share Repurchase Agreement entered into on July 23, 2024, Allegro has agreed to repurchase from Sanken, in a privately negotiated transaction, a total of 39 million shares of common stock at
Pursuant to the Share Repurchase Agreement, Sanken has agreed to a 14-month lock-up. Additionally, Allegro and Sanken entered into an Amended and Restated Stockholders Agreement on July 23, 2024 (the “Amendment”). The Amendment provides that Sanken is entitled to nominate two directors to the board of directors as long as Sanken and its affiliates beneficially own, directly or indirectly, at least
PJT Partners is acting as financial advisor to Allegro in connection with these transactions.
About Allegro MicroSystems, Inc.
Allegro MicroSystems 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 Electric Co., Ltd.
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 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 amendments to Allegro’s existing credit agreement and use of proceeds from loans thereunder, the Amendment, the Share Repurchase Agreement, 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 the prospectus supplement related to this offering and our other filings with the U.S. Securities and Exchange Commission, 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. 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 Data:
Jalene Hoover
VP of IR & Corporate Communications
Phone: +1 512 751-6526
jhoover@allegromicro.com
FAQ
How many shares is Allegro MicroSystems (ALGM) repurchasing from Sanken Electric?
What is the price per share for Allegro MicroSystems' (ALGM) repurchase from Sanken?
How is Allegro MicroSystems (ALGM) financing the share repurchase from Sanken?
What will be Sanken's ownership percentage in Allegro MicroSystems (ALGM) after the repurchase?
How long is the lock-up period for Sanken following the Allegro MicroSystems (ALGM) share repurchase?
