Entegris plans new debt financing for CMC Materials purchase

By Sara Rosenberg

New York, Dec. 15 – Entegris Inc. plans on getting new debt financing to help fund its acquisition of CMC Materials Inc., according to a news release.

Company officials said in a call that they expect to use about $4.5 billion of debt with rates north of its current debt rates.

Morgan Stanley Senior Funding Inc. provided the debt commitment.

Under the agreement, CMC Materials is being bought for $133.00 in cash and 0.4506 shares of Entegris common stock for each share of CMC Materials common stock they own. The transaction has an enterprise value of about $6.5 billion.

Upon completion, Entegris shareholders will own around 91% of the combined company and CMC Materials shareholders will own about 9%.

Along with the debt and equity, the company will use cash on hand to fund the acquisition.

Pro forma adjusted gross leverage is expected to be about 4x at closing. The company believes it will be well positioned to rapidly reduce its leverage to less than 3x with roughly $1.1 billion in adjusted EBITDA on a pro forma LTM basis including synergies.

Closing is anticipated in the second half of 2022, subject to customary conditions, including regulatory approvals and approval by CMC Materials shareholders.

Entegris is a Billerica, Mass.-based supplier of advanced materials and process solutions for the semiconductor and other high-technology industries. CMC Materials is an Aurora, Ill.-based supplier of advanced materials primarily for the semiconductor industry.

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