The courting of Coherent may soon be complete as the company today agreed to a revised buyout offer of $6.6 billion from Lumentum. This comes just days after Coherent considered the latest offer by II-VI to be “superior”. Why is Coherent so popular? The company, which was founded in 1966 is a leader in lasers and laser-based technology that’s at the core of almost every part of our daily lives—but especially in up and coming technologies such as 5G networks. Three suitors were vying for the acquisition of this laser powerhouse, dating back to January when Coherent agreed to a $5.7 billion deal with Lumentum. When Coherent accepted that offer, we reported on it as if it were a done deal—read about it here. However, there was more to come. Here’s a quick look at the history of this transaction:
February 8, MKS Instruments made an unsolicited offer worth $6 billion. At the time MKS believed its proposal offers compelling strategic and financial benefits for the stockholders of both MKS and Coherent and constitutes. Read more about this proposal here.
February 12 II–VI Incorporated topped the MKS bid with an offer totalling $6.2 billion. II-VI believed that it had a “greater certainty of closing” because it has less product overlap than Lumentum or MKS. Read more about this proposal here.
March 5 MKS revised its offer to acquire Coherent, but then dropped the offer on March 8 when Coherent chose II-VI as its superior suitor.
March 8 II-VI offered a revised proposal worth about $6.5 billion. Coherent announced that the II-VI offer was superior and that it intended to terminate its merger agreement with Lumentum unless they received a revised proposal by March 11. Note that by terminating the agreement signed with Lumentum in January, Coherent would owe Lumentum a $217.6 million termination fee.
March 10 Lumentum upped its offer to $6.6 billion and Coherent agreed to this revised buyout offer. Assuming that this is finally a done deal, Coherent stockholders should receive $175 and just over one Lumentum share for each share held.
Alan Lowe, Lumentum President and CEO commented on the transaction: "Combining with Coherent helps us to diversify our business and achieve scale in important and growing markets. The combined company will have a strong financial profile with a more diversified revenue mix and significant synergy opportunities that will deliver enhanced value to our stockholders. The Lumentum-Coherent transaction continues to have a clear path to completion and we are moving forward expeditiously to achieve the remaining approvals necessary to complete the transaction."
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