TTM armed a seven-week self-destruct on $500 million of notes. Epiq closed in time.
TTM's new 6.750% notes came with a kill switch: full redemption at 100 if the Epiq Solutions deal slipped past November 15. Epiq closed September 30, so $1.6 billion of new debt stays on a stock trading at 56 times trailing earnings.
Vincent Jiang · 3 min read
A bond built to vanish
Buyers of TTM Technologies' new $500 million of 6.750% senior notes accepted a familiar high-yield clause on a short clock: paper built to vanish if the Epiq Solutions acquisition slipped 1. The September 24, 2026 indenture obliged redemption of every note at 100% of principal plus accrued interest if the deal was not consummated by November 15, 2026, with an automatic extension to May 15, 2027 1. Seven weeks of leash on eight years of paper: the notes mature October 1, 2034 1.
$1.6 billion in one week
The fuse went out early. TTM closed the Epiq purchase on September 30, an all-cash $1.1 billion deal funded by the notes plus a $300 million term loan A and an $800 million term loan B, the loans drawn the same day 2. The seller, Veritas Capital's Vantage fund, bought Epiq in 2022 and exits with $1.1 billion, Goldman Sachs its lead advisor 3. Leftover proceeds may pay down the revolver toward Swiss Technology Group AG, a purchase still unpriced 17.
The banks on both sides of the desk
The complication sits in the filing, not the deal. Affiliates of the notes' initial purchasers hold the commitments on the $800 million term loan B and, by the 8-K's own disclosure, may receive a portion of the notes' proceeds 1. The unsecured notes rank behind $1.1 billion of new secured loans, level with TTM's 4.000% notes due 2029, paying 275 basis points more than paper of equal rank 1. Item 3.03 of the same filing restricts dividends and other distributions on TTM stock 1.
The new notes rank behind $1.1B of secured loans in TTM's $1.6B raise
Data
| Part | New debt, September 2026 | Share |
|---|---|---|
| Term loan B (secured) | $0.8B | 50% |
| Term loan A (secured) | $0.3B | 18.7% |
| 6.750% senior notes (unsecured) | $0.5B | 31.3% |
Who pays: the equity that found the bill
TTMI fell 6.9% on September 28 to $120.73, 45.5% below its June high of $221.47, still up 71% for the year 4. The stock trades at 56.0 times trailing earnings against a five-year median of 31.0, but 18.0 times forward earnings, a gap that prices in earnings roughly tripling 5.
Trailing earnings cost 56 times; the forward multiple assumes they roughly triple
- P/E
- Estimate
Data
| P/E | |
|---|---|
| Trailing P/E | 56x |
| 5-year median P/E | 31x |
| Forward P/E (estimate) | 18x |
Insiders net-sold $34.8 million over twelve months, $36.5 million sold against $1.6 million bought 5. CEO Edwin Roks went the other way on August 25, buying 10,000 shares at an average $111.77, about $1.1 million of his own cash 6.
All of it lands on a business that printed $1.004 billion of second-quarter revenue, up 37.4%, with data-center and networking sales up 91% and only $1.078 billion of debt before the raise 78.
Quarterly revenue climbed from $617 million to $1.00 billion in eight quarters
Data
| Revenue | |
|---|---|
| Q3 '24 | $0.62B |
| Q4 '24 | $0.65B |
| Q1 '25 | $0.65B |
| Q2 '25 | $0.73B |
| Q3 '25 | $0.75B |
| Q4 '25 | $0.77B |
| Q1 '26 | $0.85B |
| Q2 '26 | $1B |
The other side of the trade
The bulls have receipts. Reportedly, Third Point took a new stake and Bank of America a new position days before pricing, and Needham kept its Buy while cutting its target to $175 from $220 4. Net leverage stood at 0.9 times before the raise, and TTM expects Epiq immediately accretive to adjusted EBITDA, dilutive to non-GAAP earnings in 2027, accretive in 2028 27. None of that covers the first coupon: the notes alone accrue about $34 million of interest a year 1.
The tell from here is the interest line
Third-quarter sales are guided to $1.10 billion to $1.14 billion; when TTM reports them, the interest line is the tell 7. Swiss Technology Group AG and ILFA GmbH, TTM's entry into Europe, were pegged for a third-quarter close and stay unpriced 7. The redemption clause is dead paper now. The fuse went out; the debt did not.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
