II-VI Inc Merges With Finisar In US$3.2 Billion Deal
Created November 9, 2018
News and BusinessStrategic Combination Has Leading Positions in Photonics and Compound Semiconductors
Engineered materials and optoelectronic components specialist II-VI Inc is to merge with major optical communications supplier Finisar Corp. The duo have entered into a definitive agreement under which II-VI will acquire Finisar in a cash and stock transaction with an equity value of approximately US$3.2 billion.
Under the terms of the merger agreement, which has been unanimously approved by the Boards of Directors of both companies, Finisar’s stockholders will receive, on a pro-rated basis, US$15.60 per share in cash and 0.2218x shares of II-VI common stock, valued at $10.40 per share based on the closing price of II-VI’s common stock of $46.88 on November 8, 2018. The transaction values Finisar at US$26.00 per share, or approximately US$3.2 billion in equity value and represents a premium of 37.7% to Finisar’s closing price on November 8, 2018. Finisar shareholders would own approximately 31% of the combined company.
The companies say that their combination would unite two innovative, industry leaders, with complementary capabilities and cultures, to form a formidable industry-leading photonics and compound semiconductor company capable of serving the broad set of fast growing markets of communications, consumer electronics, military, industrial processing lasers, automotive semiconductor equipment and life sciences. Together they will employ over 24,000 associates in 70 locations worldwide upon closing of the transaction.
Among the benefits of the union identified by the partners are:
- – A stronger position in optical communications, with the ability to provide a full line and scalable supply of high performance datacom transceivers, products based on coherent transmission technology and ROADM solutions. The new entity will market products into next-generation undersea, long-haul and metro networks, hyperscale datacentres and in 5G optical infrastructure
- – The creation of a ompelling platform for 3D sensing and LiDAR
- – Unlocked access to larger markets
- – Maximised value creation through vertical integration
- – Enhanced financial performance
- – Accelerated revenue growth
- – Significant synergy potential
- – Strengthened earnings accretion.
“Disruptive megatrends driven by innovative uses of lasers and other engineered materials present huge growth opportunities for both of our companies,” said Dr. Vincent D. Mattera, Jr., President and CEO, II-VI Inc. “In communications, materials processing, consumer electronics and automotive, we expect that the combination with Finisar will allow us to leverage our combined technology and intellectual property in InP, GaAs, SiC, GaN, SiP and diamond to achieve faster time to market, cost and scale. Together, we believe that we will be better strategically positioned to play a strong leadership role in the emerging markets of 5G, 3D sensing, cloud computing, electric and autonomous vehicles, and advanced microelectronics manufacturing.”
“The combination of our state-of-the-art technology platforms, deep customer relationships, great assets and amazing talent will enhance our ability to hit market windows that won’t stay open for long,” added Michael Hurlston, Finisar’s CEO. “This combination will accelerate our collective growth and will take advantage of the technology, products and manufacturing expertise that Finisar has uniquely developed over the course of its 30 year history.”
