On March 25, 2025, Microchip Technology completed a mandatory convertible preferred stock offering of $1.48 billion of depositary shares, each representing a 1/20th interest in a share of 7.50% Series A Mandatory Convertible Preferred Stock, in an underwritten public offering. The offering amount included the exercise in full of the over-allotment option that Microchip had granted to the underwriters to purchase up to an additional $135 million of depositary shares.  In connection with the offering, Microchip entered into privately negotiated capped call transactions with one or more of the underwriters and other financial institutions. Microchip is one of the first technology companies to use this mandatory convertible preferred stock structure with a capped call feature.

Microchip utilized a portion of the net proceeds of the offering to cover the capped call transactions and offering expenses. The remaining net proceeds will be used to repay existing debt and for general corporate purposes.

Wilson Sonsini Goodrich & Rosati represented Microchip on the transaction. The Wilson Sonsini team included:

Corporate
Robert Suffoletta
Emily Coskey
Tamara Labanowski
Varun Lella

Corporate Finance
Erik Franks
Katie Barnes
Julia Anderson
Jiyoon Song

Derivatives
Andrew Ralston
Alex Weber
Roshanne Arathoon

Tax
Myra Sutanto Shen
Anjali Krishnan

For more information, please see Microchip’s March 20, 2025, 8-K filing.