TTM is paying 6.75% for money it must hand back if its $1.1 billion deal dies
TTM's new $500 million notes fund a $1.10 billion defense-electronics acquisition and promise bondholders 100 cents back if the deal misses 15 November. Equity buyers, Dan Loeb's Third Point reportedly among them, are paying 57 times earnings for the same event.
Vincent Jiang · 2 min read
A bond with a return ticket
TTM Technologies closed $500 million of 6.750% senior notes due 2034 on 24 September, priced at par 1. The indenture's first promise is an exit: if the $1.10 billion acquisition of Epiq Solutions does not close by 15 November 2026, a deadline that extends automatically to 15 May 2027 under certain conditions, TTM must redeem every note at 100% of principal plus accrued interest 1. Holders also keep a 101% put on any change of control 1.
Junior to $1.1 billion of new loans
The notes are one tranche of a $1.6 billion package for Epiq, a Veritas Capital portfolio company that builds software-defined radios, alongside a planned $300 million term loan A and $800 million term loan B 12. The notes rank equal to the existing 4.000% notes due 2029 and effectively behind every secured facility, including both new loans 1. Closing still waits on Hart-Scott-Rodino clearance 3.
Secured loans carry $1.1B of TTM's $1.6B Epiq financing; the new notes sit behind them
- Estimate
Data
| Value | |
|---|---|
| Term Loan B (secured) (estimate) | $800 |
| New 6.75% notes (unsecured) | $500 |
| Term Loan A (secured) (estimate) | $300 |
Fifty-seven times earnings for the deal the bonds hedge
The equity case is real: record second-quarter revenue of $1.004 billion, up 37.4%, on a 91% surge in data center and networking sales 4. The financing news lifted the stock 9.5% in a day, to $129.17 on 25 September, 56.7 times earnings against an average analyst target of $203 56. Dan Loeb's Third Point is building a stake, Simply Wall St reports 7.
Simply Wall St's DCF still puts fair value below the price, on trailing free cash flow of about $28.3 million against a $13.38 billion market cap 86. The quarter-end balance sheet carried $980.0 million of principal debt against $507.9 million of cash 34.
TTM's capex has outrun its free cash flow in five of the last eight quarters
- Operating cash flow
- Capex
- Free cash flow
Data
| Operating cash flow | Capex | Free cash flow | |
|---|---|---|---|
| Q3 '24 | $0.07B | $0.04B | $0.02B |
| Q4 '24 | $0.09B | $0.05B | $0.03B |
| Q1 '25 | -$0.01B | $0.06B | -$0.07B |
| Q2 '25 | $0.1B | $0.06B | $0.04B |
| Q3 '25 | $0.14B | $0.1B | $0.04B |
| Q4 '25 | $0.06B | $0.07B | — |
| Q1 '26 | $0.02B | $0.11B | — |
| Q2 '26 | $0.1B | $0.05B | $0.05B |
Seven weeks to 15 November
Management's counter is company math: net leverage of 0.9x in the second quarter, a projected 2.3x at close falling to 1.5x to 1.7x within 12 to 18 months, and 17.4 times expected 2027 EBITDA once synergies count 42. The other side of that buying has a name: Granahan Investment Management, which rode the stock's 91% AI-bottleneck run, told clients it cut the position while Third Point keeps buying 97. Bondholders bought this deal with a return ticket; shareholders bought it without one.
How this brief was made
01Gathered & sourced275 channels · 1,929 articles▾
Agents swept 275 channels and ingested 1,929 articles, then de-duplicated and ranked them for signal.
02Verified & cross-validated10 claims · 25 data feeds▾
Every one of 10 load-bearing claims was checked against primary sources, with 25 live data feeds reconciling the figures and charts.
- 1SEC Form 8-K, TTM Technologies, notes offering and indenture, filed 24 September 2026
- 2TTM Technologies press release via Nasdaq, "Planned Acquisition of Epiq Solutions", 17 August 2026
- 3ECM Source, "TTM Technologies Closes $500M Senior Notes for Epiq Deal" (citing SEC Form 8-K and Q2 Form 10-Q), 26 September 2026
- 4TTM Technologies press release via Nasdaq, "Second Quarter 2026 Results", 5 August 2026
- 5Simply Wall St via Yahoo Finance UK, "TTM Technologies (TTMI) Is Up 9.5% After Debt-Funded AI and Defense Acquisition Push Announcement", 22 September 2026
- 6TipRanks, TTM Technologies (TTMI) quote and analyst forecast page, 25 September 2026 close
- 7Simply Wall St via Yahoo Finance, "TTM Technologies (TTMI) Could Be 40% Undervalued On Activist Interest And New Debt", 23 September 2026
- 8Simply Wall St via Yahoo Finance, "TTM Technologies (TTMI) Stock Could Be 17% Overvalued Following Third Point Interest", 22 September 2026
- 9Insider Monkey via Yahoo Finance, "TTM Technologies' (TTMI) 91% Rally Fueled by AI Bottleneck Rotation" (Granahan Q2 2026 letter), 25 September 2026
- 10Sharadar quarterly fundamentals, from TTM Technologies's SEC filings, retrieved 27 September 2026
03Reviewed & edited2 human editors▾
2 editors read the draft against the evidence, tuned the framing, and signed off before it shipped.
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