– Best in class photonics capabilities join forces to accelerate innovation and industry roadmaps
– Strengthens and broadens R&D capabilities and product portfolio
– Estimate more than $60 million in annual run-rate synergies within 12 to 24 months
– Expected to be accretive to non-GAAP earnings per share immediately after closing
Lumentum a key developer of photonics products for optical networking and lasers for industrial and consumer markets, and Oclaro, a leader in optical components and modules for the long-haul, metro, and data center markets, have announced that the two companies have signed a definitive agreement, unanimously approved by the boards of directors of both companies, pursuant to which Lumentum will acquire all of the outstanding common stock of Oclaro.
For each share of Oclaro stock held, Oclaro stockholders will be entitled to receive $5.60 in cash and 0.0636 of a share of Lumentum common stock, subject to the terms of the definitive agreement. The transaction values Oclaro at $9.99 per share or approximately $1.8 billion in equity value, based on the closing price of Lumentum’s stock on March 9, 2018, of $68.98.
The transaction value represents a premium of 27% to Oclaro’s closing price on March 9, 2018 and a premium of 40% to Oclaro’s 30 day average closing price. Oclaro stockholders are expected to own approximately 16% of the combined company at closing.
“Joining forces with Oclaro strengthens our product portfolio, broadens our revenue mix, and positions us strongly for the future needs of our customers. Oclaro brings its leading Indium Phosphide laser and Photonic Integrated Circuit and coherent component and module capabilities to Lumentum.
The combined company will drive innovation faster and accelerate the development of products to enable our customers to win,” said Alan Lowe, Lumentum’sPresident and CEO. “We are delighted to welcome the talented Oclaro team to Lumentum and look forward to a swift completion of the transaction with a focus on supporting our customers and delivering shareholder value.”
“Together, we will be an even stronger player in fibre optic components and modules for high-speed communications and a market leader in 3D sensing,” said Greg Dougherty, Oclaro’s CEO, “I am extremely proud of what the Oclaro team has accomplished over the last five years. We have enjoyed tremendous success and this combination will create even more exciting opportunities for the team.”
The transaction is expected to generate more than $60 million of annual run-rate synergies within 12 to 24 months of the closing and be immediately accretive to non-GAAP earnings per share.
Lumentum intends to fund the cash consideration with a combination of cash on hand from the combined companies’ balance sheets and $550 million in debt financing. The transaction is expected to close in the second half of calendar 2018, subject to approval by Oclaro’sstockholders, antitrust regulatory approval in the US and China, and other customary closing conditions.
Board of Directors
One member of Oclaro’s Board of Directors, as mutually determined, will join Lumentum’sBoard of Directors upon the closing of the transaction.