Schneider Electric SE sold 6 billion euros, or about $6.8 billion, of bonds to help finance its acquisition of PTC Inc., tapping the investment-grade market a week after raising a matching amount from shareholders.
The French energy-management and automation company launched the multitranche offering on Monday under its euro medium-term note program and announced its completion Wednesday. The bonds have an average maturity of 8.2 years and an average coupon of about 4.3%.
Six slices
The sale was split into six tranches: 750 million euros of floating-rate notes due November 2028 paying 0.45 percentage point over three-month Euribor; 1 billion euros due 2030 at 4%; 1.25 billion euros due 2032 at 4.25%; 1.25 billion euros due December 2035 at 4.5%; 1.25 billion euros due 2038 at 4.75%; and 500 million euros due 2046 at 5%. Implied yields ranged from about 4.08% on the 2030 notes to about 5.08% on the longest bonds.
Paying for a $23.7 billion software deal
Schneider agreed on Oct. 5 to buy Boston-based PTC, a maker of product-design and lifecycle-management software, for $205 a share in cash, valuing its equity at about $22.6 billion and the business at about $23.7 billion including debt. The roughly 22 billion euros of cash needed is backed by a bridge loan from Morgan Stanley and Société Générale, which Schneider is replacing with permanent financing.
The company said at the outset that it expected to fund the purchase with 5 billion to 6 billion euros of new equity and 16 billion to 17 billion euros of new debt across several currencies. It completed a 6 billion euro accelerated share sale earlier this month, and the euro bonds now cover part of the debt portion, leaving more borrowing to come in other currencies. Schneider has said it expects to keep A-category credit ratings. The deal is expected to close by the third quarter of 2027, subject to PTC shareholder and regulatory approvals.
