Analog Devices to use $7.3 billion of new debt, cash and shares to acquire Linear Technology

By Lisa Kerner

Charlotte, N.C., July 26 – Analog Devices, Inc. will fund its $14.8 billion acquisition of Linear Technology Corp. using $7.3 billion of new long-term debt, cash from the combined company’s balance sheet and 58 million Analog shares, according to Analog chief financial officer David Zinsner.

The new debt will be a mixture of loans and bonds with an expected blended rate of about 3%, with a portion of the new debt raised expected to end up offshore, Zinsner said during a conference call on Tuesday.

Analog plans to delever quickly at a rate of about $1 billion a year, said the CFO.

The new long-term debt is supported by a fully underwritten bridge loan commitment from J.P. Morgan, BofA Merrill Lynch and Credit Suisse, according to a news release.

Under the terms of the transaction, Linear Technology shareholders will receive $46 per share in cash and 0.2321 of a share of Analog Devices common stock for each share of Linear Technology common stock they hold. The transaction values Linear Technology at about $60 per share.

Closing is expected to occur in the first half of calendar 2017.

The cash-and-stock deal values the combined company at about $30 billion.

Analog Devices is a maker of signal processing chips based in Norwood, Mass.

Linear Technology designs, manufactures and markets analog integrated circuits and is based in Milpitas, Calif.

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