The Board of Directors of Coherent selected the latest acquisition proposal from II-VI over the competing bid from Lumentum. In making its determination, the Coherent board of directors evaluated the comparative benefits and risks of the II-VI and Lumentum proposals, including the near-term and long-term financial opportunities and risks presented by each proposal, the potential synergies available through a combination with each company, and the complementary businesses of each company.
Under the II-VI offer, each share of Coherent common stock will be exchanged for $220.00 in cash and 0.91 of a share of II-VI common stock at the completion of the transaction.
Coherent confirmed that it has terminated he March 9, 2021 merger agreement between Coherent and Lumentum and paying Lumentum the $217.6 million termination fee contemplated by their merger agreement in order to enter into a new merger agreement with II-VI.
II-VI said it plans to finance the transaction with cash on hand, approximately $5.4 billion in fully committed debt financing from J.P. Morgan Securities LLC and an equity investment from Bain Capital. Bain Capital has committed $1.5 billion in the combined company at a conversion price of $85.00 per share and has confirmed it is willing to increase this commitment by at least $300 million of an additional $650 million optional amount on the same terms, for a total commitment of at least $1.8 billion.
Dr. Vincent D. Mattera, Jr., Chief Executive Officer of II-VI, states: “We are pleased to have reached an agreement with Coherent to create a global leader in photonic solutions, compound semiconductors and laser technology and systems. Together, we will have significant opportunities to accelerate our growth through complementary technology platforms, strengthen our competitiveness by using our combined scale across the value chain, benefit from deeper market intelligence and expertise, and further diversify our businesses by end market and geography. Moreover, the combination of II-VI and Coherent will increase our collective exposure to irreversible megatrends for decades to come.
For its part, Lumentum noted Coherent’s Board of Directors “chose to accept an offer that is inferior in overall value and cash consideration. Using the closing prices as of March 24, 2021, Lumentum’s offer had a value of $283.12 while the value of II–VI Incorporated’s (NASDAQ: IIVI) (“II-VI”) offer was $281.21.”
