Flextronics gets $2.5 billion unsecured term loan commitment for Solectron buy

By Sara Rosenberg

New York, June 4 - Flextronics International Ltd. has received a "backstop" commitment for a $2.5 billion seven-year senior unsecured term loan to help fund its acquisition of Solectron Corp., company officials said in a conference call Monday.

Citigroup is the lead bank on the deal.

Although the company has the loan commitment, it will continue to evaluate alternative long-term financing arrangements, officials added in the call.

Under the agreement, shareholders of Solectron will receive total consideration currently valued at $3.6 billion.

Each share of common stock of Solectron will be converted into the right to receive, at the election of each of the individual holders of Solectron shares, either, but not a combination of, 0.3450 shares of Flextronics or a cash payment of $3.89 per share, subject to the limitation that not more than 70% and no less than 50% of Solectron shares will be converted into shares of Flextronics.

The cash payment can range from around $1.06 billion to around $1.77 billion.

In addition to funding the cash payment, proceeds from the term loan will be used to refinance Solectron's debt, if required.

The transaction is expected to close by the end of 2007, subject to customary closing conditions, including shareholder approvals of both companies and certain regulatory approvals.

Flextronics is a Singapore-based electronics manufacturing services provider. Solectron is a Milpitas, Calif.-based provider of complete product lifecycle services.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.