Company Update (NASDAQ:CY): Cypress Semiconductor Corporation Proposed $250 Million Convertible Notes Offering

Cypress Semiconductor Corporation (NASDAQ:CY) announced its intention to offer, subject to market conditions and other factors, $250.0 million aggregate principal amount of convertible senior notes due in 2022 (the “notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Act”).  Cypress also expects to grant the initial purchasers of the notes a 13-day option to purchase up to an additional $37.5 million aggregate principal amount of notes, solely to cover over-allotments, if any.

Cypress expects to use the net proceeds of the offering of the notes and an additional $450.0 million term loan under its existing credit facility to pay the cost of the capped call transactions described below, finance the purchase price and costs associated with the previously announced acquisition of Broadcom Corporation’s Wireless Internet of Things business and certain related assets, repay approximately $107.0 million in revolving loans under Cypress’ existing credit facility and pay fees and expenses related to the foregoing.

The notes will be unsecured, senior obligations of Cypress, and interest will be payable semi-annually in arrears.  The notes will be convertible into cash, shares of Cypress’ common stock (“common stock”), or a combination thereof, at Cypress’ election.  The interest rate, conversion rate and other terms of the notes are to be determined upon pricing of the offering. (Original Source)

Shares of Cypress Semiconductor closed last Friday at $10.62, up $0.33 or 3.21%. CY has a 1-year high of $12.85 and a 1-year low of $6.30. The stock’s 50-day moving average is $10.05 and its 200-day moving average is $8.83.

On the ratings front, CY has been the subject of a number of recent research reports. In a report issued on May 17, Needham analyst Rajvindra Gill reiterated a Buy rating on CY, with a price target of $12, which implies an upside of 13.0% from current levels. Separately, on April 28, Credit Suisse’s John Pitzer reiterated a Hold rating on the stock and has a price target of $9.

According to, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Rajvindra Gill and John Pitzer have a total average return of 15% and 10% respectively. Gill has a success rate of 57.1% and is ranked #52 out of 3974 analysts, while Pitzer has a success rate of 65.6% and is ranked #171.

Cypress Semiconductor Corp. manufactures, designs, develops and markets digital and mixed signal integrated circuits. Its offerings include the flagship Programmable System-on-Chip families and derivatives such as CapSense touch sensing and TrueTouch solutions for touchscreens. The company operates through four reportable segments: Memory Products Division, Data Communications Division, Programmable Systems Division and Emerging Technologies Division. The Memory Products Division segment focuses on its static random access memory business units, general-purpose programmable clocks and process technology licensing. The Data Communications Division segment focuses on USB controllers, WirelessUSB and West Bridge peripheral controllers for handsets, PCs and tablets. The Programmable Systems Division segment focuses on the PSoC platform family of devices including PSoC 1, PSoC 3 and PSoC 5 and all derivatives; PSoC-based user interface products such as CapSense touch-sensing and TrueTouch touchscreen products; PSoC-based module solutions including Trackpad and ovation optical navigation sensors and; automotive products. The Emerging Technologies Division segment includes, AgigA Tech Inc. and Deca Technologies Inc., both of which are subsidiaries of Cypress. This segment also includes foundry business and other development-stage activities. 


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