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Sunday, Nov 27, 2022
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Semtech Announces $300 Million of New Convertible Senior Notes

Camarillo-based Semtech Corp. announced the pricing of its private offering of $300 million in aggregate principal amount of its 1.625% convertible senior notes due in 2027 last week.

The offering was upsized from the previously announced offering of $250 million.

Semtech granted the initial purchasers of the notes an option to purchase, for settlement within a 13-day period from, and including, the date on which the notes are first issued, up to an additional $37.5 million aggregate principal number of notes.

The sale of the notes is expected to close on or around Oct. 12 and is expected to result in approximately $290 million in net proceeds for Semtech. Semtech expects to use approximately $27.8 million of the net proceeds to pay the cost of convertible note hedge transactions

The remainder of the net proceeds are intended for the finance of the acquisition price for communications equipment company Sierra Wireless and to pay related fees and expenses in connection with the acquisition. If the acquisition does not go through, net proceeds will instead be used for a portion of the redemption price of the notes or for general corporate purposes.

The sale of the notes is expected to close prior to the closing of the acquisition.

Shares of Semtech closed down $2.00, or nearly 7%, to $27.23 on Friday, a day when the market closed down nearly 4%.

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