NXP Semiconductors plans $1 billion of debt for Freescale acquisition

By Sara Rosenberg

New York, March 2 – NXP Semiconductors NV intends to get $1 billion of new debt to help fund its purchase of Freescale Semiconductor Ltd., company officials said in a conference call on Monday.

Credit Suisse Securities (USA) LLC is the lead bank on the debt.

Other funds for the transaction are expected to come from $1 billion of cash from the balance sheet and about 115 million NXP ordinary shares.

Under the agreement, Freescale shareholders will receive $6.25 in cash and 0.3521 of an NXP ordinary share for each Freescale common share held at the close of the transaction.

The purchase price implies a total equity value for Freescale of about $11.8 billion and a total enterprise value of around $16.7 billion including Freescale’s net debt.

Closing is expected in the second half of the year, subject to regulatory approvals in various jurisdictions and customary conditions, as well as the approval of NXP and Freescale shareholders.

Revenue of the combined company is more than $10 billion.

At closing, net debt to EBITDA will be about 3 times, but within six quarters ne debt is expected to be back to around 2 times, officials added in the call.

NXP is an Eindhoven, Netherlands-based maker of semiconductors. Freescale is an Austin, Texas-based semiconductor company.

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