II-VI makes $6.4bn Coherent bid

Share this on social media:

The race to acquire Coherent has taken another turn as II-VI announced that it too has made an offer for the laser technology firm.

Under II-VI’s proposal to Coherent’s board of directors, Coherent’s shareholders would receive $130 in cash and 1.3055 II-VI common shares for each Coherent share. The deal would work out at around $6.4bn.

An offer of around $5.7bn was initially made for Coherent on 19 January, by Lumentum, which has previously successfully acquired Oclaro. Then, on 8 February, global metrology systems provider MKS Instruments made a $6bn acquisition proposal for Coherent

Responding to the competitive bid, Alan Lowe, president and CEO at Lumentum said: ‘We believe our transaction is superior. In contrast to the proposal by MKS Instruments, the Lumentum-Coherent transaction has a clear path to regulatory approval and completion, and Lumentum remains committed to closing the transaction in the second half of the year.’ Lumentum also stated that MKS' proposal letter to Coherent contained ‘misleading statements’.

Now, bringing a third party into the mix, II-VI states that its proposal represents a premium of 24.0 per cent to the implied value of Coherent’s merger agreement with Lumentum and 9.8 per cent premium to the implied value of MKS Instruments’ acquisition proposal. 

Vincent Mattera, chief executive officer at II-VI said: ‘The combination of II-VI and Coherent would create a uniquely strategic global leader capable of delivering to our customers the most attractive combination of photonic solutions, compound semiconductors, as well as laser technology and systems. We believe now is the right time to embark on this combination given significant megatrends, with burgeoning applications in both industrial and semiconductor capital equipment segments, including those that enable consumer electronics and displays. Moreover, II-VI expects to accelerate our growth in aerospace & defense, life sciences, and laser additive manufacturing by utilising our compelling integrated solutions in lasers, optics, and electronics. 

‘We firmly believe our proposal is far superior to Coherent’s existing merger agreement with Lumentum and the recent acquisition proposal from MKS Instruments, as it is a more compelling strategic fit and would provide Coherent’s shareholders with meaningful upside opportunity. Moreover, we are confident that our transaction would have greater certainty of closing. In particular, we have not identified any competitive overlaps between Coherent’s and II-VI’s respective businesses in China. We believe we would have significant and diversified opportunities to accelerate our growth through complementary technology platforms, to increase our competitiveness by using scale across the value chain, to demonstrate deeper market intelligence and expertise, and to further diversify our businesses and revenue streams.’

II-VI previously successfully acquired and integrated optical communications firm Finisar for $3.2bn.


Related news

Recent News

03 March 2021

Dell’Oro Group has published its latest Optical Transport Quarterly Report.

03 March 2021

Radius Payment Solutions has acquired Belfast-based independent operator, Rainbow Communications.

02 March 2021

UK digital infrastructure provider, Openreach has selected the optical network monitoring system (ONMSi) from Viavi Solutions to accelerate its full-fibre broadband deployment across the country.

23 February 2021

Investment firm KKR has entered into a $1bn agreement with Telefónica to create an open access wholesale company in Chile.