Cohu launches $350 million term loan B at Libor plus 275-300 bps

By Sara Rosenberg

New York, Sept. 6 – Cohu Inc. launched on Thursday its $350 million seven-year covenant-light senior secured term loan B (B1/BB-) with price talk of Libor plus 275 basis points to 300 bps with a 0% Libor floor and an original issue discount of 99.5, according to a market source.

Deutsche Bank Securities Inc. is the bookrunner on the deal.

Commitments are due at noon ET on Sept. 20, the source said.

Proceeds will be used to help fund the acquisition of Xcerra Corp. for $9.00 in cash and 0.2109 of a share of Cohu common stock. The transaction values Xcerra at about $796 million in equity value, with a total enterprise value of around $627 million, after excluding Xcerra’s cash and marketable securities net of the debt on its balance sheet as of Jan. 31.

Other funds for the transaction are expected to come from cash on hand from the combined companies’ balance sheets.

Secured leverage will be 2.7 times and net debt will be 1.7 times.

Closing is expected by Oct. 15, subject to approval by both companies’ shareholders, antitrust regulatory approvals and other customary conditions.

Xcerra shareholders are expected to own about 30% of the combined company at closing.

Cohu is a Poway, Calif.-based supplier of semiconductor test and inspection handlers, micro-electro mechanical system test modules, test contactors and thermal sub-systems. Xcerra is a Norwood, Mass.-based parent company of four brands in the semiconductor and PCB test industries.

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