Ichor Holdings, Ltd. Announces Public Offering of Ordinary Shares

Rhea-AI Summary

Ichor Holdings, Ltd. (ICHR) has announced a $125 million underwritten public offering of its ordinary shares. The company plans to use the proceeds for debt repayment, capital expenditures, potential acquisitions, growth opportunities, and strategic transactions. TD Cowen and Stifel are the joint book-running managers for the offering.

Insights

Financial Analyst

With Ichor Holdings, Ltd. initiating a public offering of $125 million in ordinary shares, there is a clear indication of the company's strategy to strengthen its financial position. The decision to offer additional shares to repay outstanding debt and for general corporate purposes suggests a proactive approach to managing the company's capital structure. Such a move typically aims to reduce interest expenses and improve the balance sheet, potentially leading to an enhanced credit profile.

The offering also hints at possible future expansions or acquisitions, as the company has mentioned the use of proceeds for capital expenditures, potential acquisitions, growth opportunities and strategic transactions. This could indicate that Ichor Holdings is positioning itself for growth in the semiconductor capital equipment industry, which is known for its cyclicality and competitive landscape. Investors might view this as a positive step towards long-term value creation, provided that the company invests wisely in opportunities that align with its core competencies and market trends.

However, the dilutive effect of the new shares on existing shareholders cannot be ignored. The immediate impact could be a decrease in earnings per share, which might affect the stock price negatively in the short term. It's crucial for investors to monitor the final terms of the offering, disclosed in the final prospectus supplement, to understand the full implications of the offering on their investment.

Market Research Analyst

The semiconductor industry is characterized by high capital intensity and rapid technological advancements. Ichor Holdings' move to secure additional capital through a public offering could be a strategic maneuver to stay competitive in this dynamic environment. The intended use of the proceeds for capital expenditures may signal the company's commitment to investing in state-of-the-art manufacturing capabilities and innovation.

Moreover, the involvement of established financial institutions like TD Cowen and Stifel as joint book-running managers, along with other co-managers, lends credibility to the offering and might attract institutional investors seeking exposure to the semiconductor sector. This could potentially increase trading volumes and liquidity for Ichor Holdings' shares, which is generally favorable from a market perspective.

It's also worth noting that the semiconductor industry is benefiting from trends such as the Internet of Things (IoT), artificial intelligence (AI) and 5G technology, which drive demand for advanced semiconductor components. If Ichor Holdings leverages the raised capital to tap into these growth areas, it could see substantial returns on investment over the long term. However, investors should be aware of the inherent risks associated with the sector, including cyclical demand patterns and intense competition.

Legal Expert

The offering is being conducted under an effective shelf registration statement on Form S-3, which allows for a more streamlined process and quicker access to the market. The use of a shelf registration is common for companies that meet certain regulatory criteria, offering them flexibility in timing the market for capital raising activities. The fact that Ichor Holdings has filed a preliminary prospectus supplement with the SEC provides transparency to investors, allowing them to make informed decisions based on the latest information about the company's financial health and strategic direction.

It is important for potential investors to review the prospectus supplement and accompanying base prospectus carefully to understand the risks involved. Legal disclosures regarding investment objectives, risks, charges and expenses are not only regulatory requirements but also essential for assessing the potential impact of the investment on one's portfolio. The final terms of the offering, once filed, will provide definitive details that are crucial for evaluating the offering's suitability for individual investment strategies.

FREMONT, Calif.--(BUSINESS WIRE)-- Ichor Holdings, Ltd. (NASDAQ: ICHR), a leader in the design, engineering, and manufacturing of critical fluid delivery subsystems and components for semiconductor capital equipment, today announced that it has commenced an underwritten public offering of $125 million of its ordinary shares. In addition, the Company intends to grant the underwriters a 30-day option to purchase up to an additional 15% of its ordinary shares sold in the offering at the public offering price, less underwriting commissions.

The Company intends to use the net proceeds it receives from the offering to repay outstanding indebtedness and for general corporate purposes, which may include, among other things, capital expenditures, potential acquisitions, growth opportunities, and strategic transactions.

TD Cowen and Stifel are acting as joint book-running managers and representatives of the underwriters for the offering. B. Riley Securities, Needham & Company, Craig-Hallum and D.A. Davidson & Co. are acting as co-managers for the offering.

The shares are being offered by the Company pursuant to an effective shelf registration statement on Form S-3 that was filed with the Securities and Exchange Commission (“SEC”) on August 9, 2023 and became effective upon such filing.

This offering is being made only by means of a prospectus supplement and accompanying base prospectus that form a part of the registration statement. A preliminary prospectus supplement relating to and describing the terms of the offering was filed with the SEC on March 12, 2024, copies of which may be obtained for free by visiting the SEC’s website at www.sec.gov. The prospectus supplement and accompanying base prospectus may also be obtained by sending a request to: Cowen and Company, LLC, 599 Lexington Avenue, New York, NY 10022, by telephone at (833) 297-2926, or by email at Prospectus_ECM@cowen.com or Stifel, Nicolaus & Company, Incorporated, Attention: Syndicate, One Montgomery Street, Suite 3700, San Francisco, CA 94104, by telephone at (415) 364‑2720, or by email at syndprospectus@stifel.com. The final terms of the offering will be disclosed in a final prospectus supplement to be filed with the SEC.

Investors are advised to carefully consider the investment objective, risks, charges and expenses of Ichor Holdings, Ltd. before investing. The preliminary prospectus supplement dated March 12, 2024 and the accompanying prospectus dated August 9, 2023 contain this and other information about Ichor Holdings, Ltd. and should be read carefully before investing.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the Company’s ordinary shares or any other securities, and there shall not be any offer, solicitation, or sale of securities mentioned in this press release in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such any state or jurisdiction.

About Ichor

We are a leader in the design, engineering and manufacturing of critical fluid delivery subsystems and components primarily for semiconductor capital equipment, as well as other industries such as defense/aerospace and medical. Our primary product offerings include gas and chemical delivery subsystems, collectively known as fluid delivery subsystems, which are key elements of the process tools used in the manufacturing of semiconductor devices. Our gas delivery subsystems deliver, monitor and control precise quantities of the specialized gases used in semiconductor manufacturing processes such as etch and deposition. Our chemical delivery subsystems precisely blend and dispense the reactive liquid chemistries used in semiconductor manufacturing processes such as chemical-mechanical planarization, electroplating, and cleaning. We also provide precision-machined components, weldments, e-beam and laser welded components, precision vacuum and hydrogen brazing, surface treatment technologies, and other proprietary products. We are headquartered in Fremont, CA.
https://ir.ichorsystems.com/

Safe Harbor Statement

Certain statements in this release are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words “anticipate,” “believe,” “contemplate,” “designed,” “estimate,” “expect,” “forecast,” “goal,” “guidance,” “intend,” “may,” “outlook,” “plan,” “predict,” “project,” “see,” “seek,” “target,” “would” and similar expressions or variations or negatives of these words are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

Examples of forward-looking statements include statements regarding the completion, timing, size and use of proceeds of the offering and the satisfaction of closing conditions related to the offering, as well as any other statement that does not directly relate to any historical fact. Such forward-looking statements are based on our management’s current expectations about future events as of the date hereof and involve many risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Our actual results and outcomes could differ materially from those included in these forward-looking statements as a result of various factors, including, but not limited to: (1) geopolitical, economic and market conditions, including high inflation, changes to fiscal and monetary policy, high interest rates, currency fluctuations, challenges in the supply chain and any disruptions in the global economy as a result of the conflicts in Ukraine and the Middle East, (2) dependence on expenditures by manufacturers and cyclical downturns in the semiconductor capital equipment industry, (3) reliance on a very small number of original equipment manufacturers for a significant portion of sales, (4) negotiating leverage held by our customers, (5) competitiveness and rapid evolution of the industries in which we participate, (6) risks associated with weakness in the global economy and geopolitical instability, (7) keeping pace with developments in the industries we serve and with technological innovation generally, (8) designing, developing and introducing new products that are accepted by original equipment manufacturers in order to retain our existing customers and obtain new customers, (9) managing our manufacturing and procurement process effectively, (10) defects in our products that could damage our reputation, decrease market acceptance and result in potentially costly litigation, and (11) our dependence on a limited number of suppliers. Additional information concerning these and other factors can be found in our filings with the SEC, including other risks, relevant factors, and uncertainties identified in the “Risk Factors” section of our Annual Report on Form 10‑K for the year ended December 29, 2023 filed with the SEC on February 23, 2024 and any other periodic reports that we may file with the SEC.

All forward-looking statements in this press release are based upon information available to us as of the date hereof, and qualified in their entirety by this cautionary statement. We undertake no obligation to update or revise any forward-looking statements contained herein, whether as a result of actual results, changes in our expectations, future events or developments, or otherwise, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240312029235/en/

Greg Swyt, CFO 510-897-5200

Claire McAdams, IR & Strategic Initiatives 530-265-9899

IR@ichorsystems.com

Source: Ichor Holdings, Ltd.

FAQ

What is the purpose of Ichor Holdings, Ltd.'s $125 million underwritten public offering?

The purpose is to repay outstanding indebtedness and for general corporate purposes, including capital expenditures, potential acquisitions, growth opportunities, and strategic transactions.

Who are the joint book-running managers for the offering by Ichor Holdings, Ltd.?

TD Cowen and Stifel are the joint book-running managers for the offering.

How can investors obtain the preliminary prospectus supplement and accompanying base prospectus for the offering?

Investors can obtain the documents by visiting the SEC's website at www.sec.gov or by contacting Cowen and Company, LLC or Stifel, Nicolaus & Company, Incorporated.

What should investors consider before investing in Ichor Holdings, Ltd.?

Investors are advised to carefully consider the investment objective, risks, charges, and expenses of the company before investing.