MACOM Announces Proposed Offering of $400 Million of Convertible Senior Notes

Rhea-AI Summary

MACOM Technology Solutions Holdings (MTSI) plans to offer $400 million of convertible senior notes due 2026, with an option for an additional $60 million. These notes will be sold to qualified institutional buyers under Rule 144A of the Securities Act. The company intends to use the net proceeds to partially repay outstanding term loans. The notes will mature on March 15, 2026, and may be settled in cash, shares, or a mix. The offering is not registered under the Securities Act and will not be available in jurisdictions where it would be unlawful without registration.

Positive

• Offering of $400 million in convertible senior notes may strengthen liquidity.
• Intention to use proceeds for repaying outstanding term loans indicates focus on debt reduction.

Negative

• Convertible notes may dilute existing shareholders if converted into stock.
• The offering is subject to market conditions, which may affect pricing and terms.

MACOM Technology Solutions Holdings, Inc. (“MACOM”) (Nasdaq: MTSI), a leading supplier of semiconductor products, today announced that it intends to offer, subject to market and other conditions, $400 million aggregate principal amount of convertible senior notes due 2026 (the “Notes”). The Notes will be offered and sold to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). MACOM also expects to grant the initial purchaser of the Notes an option to purchase, within a 13-day period from, and including, the date of original issuance of the Notes up to an additional $60 million aggregate principal amount of the Notes.

MACOM intends to use the net proceeds for partial repayment of outstanding term loans.

The Notes will be senior unsecured obligations of MACOM and will mature on March 15, 2026, unless earlier repurchased, redeemed or converted. MACOM will settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at MACOM’s election. The final terms of the Notes, including the interest rate, the initial conversion rate and certain other terms of the Notes, will be determined at the pricing of the offering.

The offer and sale of the Notes and the common stock issuable upon conversion, if any, are not being registered under the Securities Act, or any state securities laws. The Notes and the common stock issuable upon conversion, if any, may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act and any applicable state securities laws.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities, in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the laws of such jurisdiction.

About MACOM

MACOM designs and manufactures semiconductor products for Telecommunication, Industrial and Defense and Data Center applications. Headquartered in Lowell, Massachusetts, MACOM has design centers and sales offices throughout North America, Europe and Asia. MACOM is certified to the ISO9001 international quality standard and ISO14001 environmental management standard.

Special Note Regarding Forward-Looking Statements

This press release contains forward-looking statements based on MACOM management’s beliefs and assumptions and on information currently available to our management. These forward-looking statements include, among others, statements about the proposed offering of convertible senior unsecured notes, the terms of the notes and the anticipated use of proceeds.

These forward-looking statements reflect MACOM’s current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause those events or our actual activities or results to differ materially from those indicated by the forward-looking statements, including potential changes in market conditions and those other factors described in "Risk Factors" in MACOM’s filings with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and other filings with the SEC. These forward-looking statements speak only as of the date of this press release, and MACOM undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

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FAQ

What is MACOM's plan for the convertible senior notes?

MACOM plans to offer $400 million in convertible senior notes to qualified institutional buyers, with an additional $60 million option.

When will the convertible senior notes mature?

The convertible senior notes are set to mature on March 15, 2026.

How does MACOM intend to use the proceeds from the notes?

The net proceeds from the offering will be used for partial repayment of outstanding term loans.

What are the risks associated with MACOM's convertible notes offering?

Risks include potential dilution for shareholders if notes are converted and dependence on market conditions for the offering's success.