Cohu finalizes $350 million term loan B at Libor plus 300 bps

By Sara Rosenberg

New York, Sept. 21 – Cohu Inc. firmed pricing on its $350 million seven-year covenant-light senior secured term loan B (B1/BB-) at Libor plus 300 basis points, the high end of the Libor plus 275 bps to 300 bps talk, according to a market source.

Furthermore, the MFN was revised to 50 bps for life from 75 bps for 12 months, the source said.

As before, the term loan has a 0% Libor floor and an original issue discount of 99.5.

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

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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