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19 March 2021

II-VI raises Coherent acquisition offer to $287.18 per share

On 17 March, Coherent Inc of Santa Clara, CA (which provides lasers and laser-based technology for scientific, commercial and industrial applications) received a revised acquisition proposal from engineered materials and optoelectronic component maker II-VI Inc of Saxonburg, PA, under which each share of Coherent common stock would be exchanged for $220 in cash and 0.91 of a share of II-VI common stock, equating to $287.18 per share, based on the 10-day volume weighted average price (VWAP) of II-VI common stock, ending 16 March.

II-VI’s revised proposal includes $5.4bn of fully committed debt financing from J.P. Morgan Securities LLC and a $1.5bn equity investment from Bain Capital (which has expressed an interest in making an additional equity investment of up to $650m on the same terms to reduce leverage). The conversion price of Bain’s entire equity investment is $85 per share. II-VI continues to expect the transaction to be accretive to non-GAAP EPS in the second year following closing.

The transaction would be subject to approval by the stockholders of Coherent and II-VI, receipt of US and foreign regulatory approvals, and other customary closing conditions.

After consultation with its financial advisors Bank of America and Credit Suisse and its legal advisors Skadden, Arps, Slate, Meagher & Flom LLP, Coherent’s board of directors has determined that II-VI’s revised acquisition proposal constitutes a ‘Company Superior Proposal’ under the terms of Coherent’s 9 March merger agreement with Lumentum Holdings Inc of San Jose, CA (which designs and makes photonic products for optical networks and lasers in industrial and consumer markets). The Coherent board also determined that II-VI’s proposal is superior to the revised acquisition proposal that Coherent received from Lumentum on 17 March.

Lumentum initially (on 18 January) offered $100 per share in cash and 1.1851 shares of Lumentum common stock for each Coherent share (valuing Coherent at $5.7bn). After II-VI on 8 March made a superior offer equating to $260 per Coherent share (worth $6.5bn in total), on 10 March Lumentum raised its offer to $261.62 per Coherent share ($6.6bn in total). On 12 March, II-VI made a further superior offer of $272.68 per Coherent share ($6.8bn). Lumentum’s 17 March revised offer equated to $275 per Coherent share ($6.9bn).

Coherent has now notifed Lumentum that it intends to terminate their merger agreement unless Coherent receives a revised acquisition proposal from Lumentum by 11:59pm Pacific Time on 22 March that the its board determines to be at least as favorable to stockholders as II-VI’s revised proposal, after taking into account all aspects of any such proposal Coherent may receive from Lumentum.

See related items:

Lumentum raises Coherent acquisition offer to $6.9bn

Coherent declares new II-VI acquisition proposal superior to amended Lumentum merger agreement

Lumentum to acquire Coherent for $5.7bn

Tags: Optical communications

Visit: www.Coherent.com

Visit: www.ii-vi.com

Visit: www.lumentum.com

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