Amphenol Secures $4 Billion in Delayed Draw Term Loans for Strategic Acquisition

Amphenol Corporation has secured $4 billion in delayed draw term loans, consisting of a three-year, $2 billion term loan and a 364-day, $2 billion term loan. The loans are undrawn at closing and can be repaid at any time without penalties. The primary purpose of the loans is to finance the acquisition of CommScope's Connectivity and Cable Solutions business. This acquisition is expected to enhance Amphenol's capabilities in the connectivity and cable solutions sector.

Amphenol Corporation (NYSE:APH) has secured $4 billion in delayed draw term loans to fund its planned acquisition of CommScope Holding Company, Inc.'s (NASDAQ:COMM) Connectivity and Cable Solutions (CCS) business. The loans, totaling $4 billion, consist of a three-year, $2 billion term loan and a 364-day, $2 billion term loan [1]. Both facilities were arranged with a syndicate of financial institutions, with JPMorgan Chase Bank, N.A. serving as administrative agent.

The loans are undrawn at closing and can be repaid at any time without premium or penalty. The three-year term loan is scheduled to mature on the third anniversary of its funding date, while the 364-day facility matures 364 days after its funding date. Amphenol's current ratio of 2.02 and moderate debt-to-equity ratio of 0.7 indicate that the company is well-positioned to manage this additional debt load [1].

Interest rates for both loans will be determined by a spread over either the base rate or the adjusted term Secured Overnight Financing Rate (SOFR), with the spread varying based on Amphenol’s debt rating. The proceeds from the loans will be used to finance a portion of the consideration for the acquisition, as well as related costs, fees, and expenses [1].

Amphenol's recent acquisitions, including its intention to acquire Trexon for approximately $1 billion in cash and CommScope’s CCS business for around $10.5 billion, reflect the company's strategy to enhance its sales and earnings per share. These moves are expected to significantly influence its future financial performance and are closely watched by investors and analysts [1].

References:
[1] https://www.investing.com/news/sec-filings/amphenol-secures-4-billion-in-term-loan-agreements-to-fund-commscope-ccs-acquisition-93CH-4209706