$125m (25m) 144a senior unsec cb pricing tonight from DB. Terms: 5yr bullet, 3-3.5% up 25-30%, protections, UOP=gcp & potential acq. They provide converged test systems & services or wireless infrastructures. $1B market. So tiny company but doing well: strong sales growth due to 3G upgrades and 4G deployment. This will be their only debt. Cash = $242m, LTM EBITDA = $30m, LTM FCF = $18m.
Did 2 acq in 2009, so another may be in the works with these cash proceeds? Low ADV of 250k. Little in the way of options. Weekly vol historically been high 30s. We’ll use 33 vol and L+750.
Theo = 103.5
Expect o/r interest.
BUY
Provider of converged test systems and services for wireless and wired infrastructure and services.
XXIA is a small test sys co. Network equipment mfg are largest customers with cisco 15% of FY09 rev.
Concentration falling as they grow cust base & cisco increases efficiency. Strong sales growth driven by 3G upgrades & beginning of 4G deploy. They have been acquisitive, doing two acq in FY09 for $122m in cash using cash on hand. Proceeds will help replenish
L +750