Conexant Offering Over-Alloted

Conexant Systems, Inc. (CNXT) announced that the underwriters of its recent public offering have exercised their over-allotment option to purchase an additional 2.1 million shares of common stock.

Last week, Conexant announced a comprehensive refinancing plan designed to improve its balance sheet and address its liquidity needs.

The company recently issued 14.0 million shares of its common stock at $4.00 each. Including the over-allotment, a total number of 16.1 million shares were issued. Conexant also offered new 11.25% senior secured notes due 2015 aggregating $175 million.

Conexant received net proceeds of $60 million from the sale of 16.1 million shares. Management intends to use the net proceeds from the common stock and debt offering along with available cash, to repurchase its outstanding $232 million 4% convertible subordinated notes due 2026.

The notes carry an option for bondholders to ask for repayment in March 2011. The new debt and equity offering along with retirement of the existing convertible debt will be the final leg of restructuring activities undertaken by management in the past few quarters. Management expects this refinancing to help the company realize the benefits associated with its business and growth opportunities.

Last year, Conexant sold off its DSL business to streamline its operations and focus on core areas of growth.

Conexant expects to capture market share with existing designs and deliver new products for imaging, audio, embedded modem and video surveillance applications. In addition, the company also plans to develop its core capabilities in analog markets and use its expertise in analog and mixed-signal design to take advantage of new opportunities in adjacent markets.
 

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