Cohu to offer $200 million in convertible senior notes due 2031

POWAY, Calif. - Semiconductor equipment supplier Cohu, Inc. (NASDAQ:COHU), with a market capitalization of $1.06 billion and strong financial health indicated by a current ratio of 4.88, announced Tuesday its intention to offer $200 million in convertible senior notes due 2031 to qualified institutional buyers in a private placement. According to InvestingPro analysis, the company currently holds more cash than debt on its balance sheet, suggesting room for additional leverage.

The company also plans to grant initial purchasers an option to buy up to an additional $30 million in notes, with settlement by October 3, 2025. The stock has shown strong momentum, gaining nearly 40% over the past six months, though current analysis suggests the stock may be overvalued.

The notes will be senior unsecured obligations maturing on January 15, 2031, unless earlier converted, redeemed or repurchased. Conversion terms will allow Cohu to satisfy obligations through a combination of cash and shares of its common stock, with specific interest rates and conversion rates to be determined during pricing.

In connection with the offering, Cohu expects to enter into capped call transactions with financial institutions to potentially reduce dilution to common stock upon conversion of the notes. These transactions would cover the number of shares initially underlying the notes, subject to anti-dilution adjustments.

Proceeds from the offering will fund the capped call transactions and general corporate purposes, according to the company’s press release statement.

The notes will be offered under Rule 144A of the Securities Act of 1933, limiting sales to qualified institutional buyers. Neither the notes nor any shares issuable upon conversion have been registered under the Securities Act, restricting their resale without registration or applicable exemption.

Cohu supplies test, automation, inspection and metrology products to the semiconductor industry, focusing on optimizing yield and productivity for manufacturers. While the company’s EBITDA stands at -$26.02 million for the last twelve months, detailed financial analysis and additional insights are available through InvestingPro’s comprehensive research reports, which offer deep-dive analysis of 1,400+ US equities.

In other recent news, Cohu Inc. reported its earnings for the second quarter of 2025, surpassing analysts’ expectations with an earnings per share (EPS) of $0.02, compared to a forecasted loss of $0.01. The company’s revenue reached $107.7 million, slightly above the forecast of $106 million. Cohu also announced that its Eclipse platform has been selected by a prominent U.S.-based semiconductor manufacturer and foundry services company for testing next-generation processor devices. The Eclipse systems will feature Cohu’s T-Core Active Thermal Control solution, capable of handling up to 3kW power dissipation.

Additionally, Cohu secured new orders for its Neon inspection platform from a leading U.S.-based memory and data storage technology company. These systems will be utilized for the inspection and metrology of high bandwidth memory (HBM) devices, which are crucial for high-performance computing and generative artificial intelligence applications. Despite these positive developments, Cohu’s stock experienced a decline, influenced by investor concerns about future market conditions and company guidance.

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