Cohu plans $350 million secured term loan B for Xcerra purchase

By Sara Rosenberg

New York, May 8 – Cohu Inc. has received a commitment for a $350 million seven-year senior secured term loan B to help fund its acquisition of Xcerra Corp., according to an 8-K filed with the Securities and Exchange Commission on Tuesday.

Deutsche Bank Securities Inc. is the lead bank on the debt.

Under the agreement, Xcerra shareholders will be entitled to receive $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, 2018.

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

As a backup for the cash, the company has received a commitment for an up to $100 million cash bridge loan.

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

Closing is expected in the second half of the year, 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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