Lumentum has signed a definitive agreement to acquire Coherent in a cash and stock transaction valued at US$5.7 billion. Under the terms of the agreement, which has been unanimously approved by the Boards of Directors of both companies, Coherent stockholders will receive US$100.00 per share in cash and 1.1851 shares of Lumentum common stock for each Coherent share they own. At closing, Coherent stockholders are expected to own approximately 27% percent of the combined company.
Lumentum says the combination unites Coherent’s leading photonics and lasers businesses, including in the microelectronics, precision manufacturing, instrumentation, and aerospace and defence markets, with Lumentum’s telecom, datacom, and 3D sensing photonics businesses, creating a diversified photonics technology company with significantly increased scale and market reach. The combination accelerates Lumentum’s penetration of the more than US$10 billion market for lasers and photonics outside of the communications and 3D sensing applications. Lumentum says the combined company will be better positioned to serve the needs of a global customer base increasingly dependent on photonics to enable important end-market transitions including the shift to digital and virtual approaches to work and life, the transition to 5G in wireless networking, advanced bioinstrumentation, advanced microelectronics, and new materials for next generation consumer electronic devices, flat panel and OLED displays, communications equipment, electric and autonomous vehicles, and energy storage.
“Today’s announcement is an important advancement of Lumentum’s strategy,” said Alan Lowe, Lumentum president and CEO. “In our five years as a standalone public company, we have focused on developing the most innovative products and technology in our industry and partnering with market leading customers to help them compete and win in their markets. As we look ahead, we are thrilled to join forces with Coherent to create one of the world’s largest and most diverse photonics technology companies with leading positions in the growing market for photonics.”
Andy Mattes, Coherent president and CEO commented, “We are excited about the combination of Lumentum and Coherent, two iconic brands in their respective photonics markets. We anticipate the combined complementary product portfolio, breadth of customer application knowledge, and R&D capabilities, all based on photonics, will accelerate innovation and adoption of photonics across the many markets that we serve,”
The transaction value represents a premium of 49% to Coherent’s closing price on January 15, 2021. Lumentum intends to finance the cash consideration of the transaction through a combination of cash on hand from the combined company’s balance sheet and US$2.1 billion in new debt financing from a fully committed Term Loan B. Two members of the Coherent Board will be appointed to the Lumentum Board, which will be expanded to nine directors, at the closing of the transaction.
The transaction is expected to close in the second half of calendar year 2021, subject to approval by Lumentum’s and Coherent’s stockholders, receipt of regulatory approvals and other customary closing conditions.
For more information, visit www.lumentum.com