Cohu closes $287.5 million convertible notes offering

POWAY, Calif. - Semiconductor equipment supplier Cohu, Inc. (NASDAQ:COHU), a company with a market capitalization of approximately $938 million, announced Monday it has closed a $287.5 million offering of 1.50% Convertible Senior Notes due 2031, which includes the full exercise of the initial purchasers’ option to buy an additional $27.5 million in notes. According to InvestingPro data, the company maintains a strong liquidity position with a current ratio of 4.88x.

The notes have an initial conversion price of approximately $27.18 per share, representing a 32.50% premium above Cohu’s closing stock price of $20.51 on September 24, 2025. The company also entered into capped call transactions that effectively increase the conversion premium to 100%, capping potential dilution up to a stock price of $41.02 per share. The stock has seen significant volatility, with InvestingPro data showing a 36% gain over the past six months despite an 11% decline in the past week.

"We are excited to have successfully completed our convertible bond offering, which enhances our strategic flexibility and supports our growth initiatives," said Luis A. Müller, Cohu’s President and CEO, in the press release statement. While analysts project the company may face profitability challenges this year, Cohu maintains a solid balance sheet with more cash than debt, as highlighted in InvestingPro’s comprehensive analysis.

Upon conversion, Cohu will satisfy its obligations by paying cash up to the aggregate principal amount of the notes being converted, with any remainder paid in cash, shares of common stock, or a combination of both.

Cohu provides test, automation, inspection and metrology products and services to the semiconductor industry. The company stated the transaction strengthens its balance sheet to support long-term growth initiatives.

DLA Piper LLP (US) served as legal counsel and ICR Capital LLC as financial advisor to the company for the transaction.

In other recent news, Cohu Inc. reported its second-quarter 2025 earnings, surpassing analysts’ expectations with an earnings per share of $0.02, while a loss of $0.01 was anticipated. The company’s revenue also exceeded forecasts, reaching $107.7 million against the expected $106 million. Cohu announced plans to offer $200 million in convertible senior notes due 2031, with an option for initial purchasers to acquire an additional $30 million in notes by October 2025. In terms of product developments, Cohu’s Eclipse platform has been selected by a leading U.S.-based semiconductor manufacturer to test next-generation processors. Additionally, Cohu secured new orders for its Neon inspection platform from a major U.S.-based memory and data storage company for high bandwidth memory device inspection. These recent developments highlight Cohu’s ongoing efforts in expanding its product offerings and securing strategic partnerships within the semiconductor industry.

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