II-VI gains Chinese government clearance for Coherent acquisition; deal close imminent
II‐VI Inc. (Nasdaq: IIVI) and Coherent, Inc. (Nasdaq: COHR) say that the State Administration for Market Regulation of the People’s Republic of China (SAMR) has finally provided antitrust clearance for II-VI’s pending acquisition of Coherent. With that final hurdle cleared, the two companies say the deal will close on or about July 1, 2022.
The two companies reached a sales agreement in March 2021 after several rounds of bidding against Lumentum and MKS Instruments (see “II-VI wins bidding for Coherent”). Under the terms of merger agreement, each share of Coherent common stock will be converted into the right to receive $220.00 in cash and 0.91 of a share of II-VI common stock, for a total deal value at the time of about $7 billion.
II-VI had expected to close the deal at the end of 2021. However, as was the case when the company acquired Finisar, getting SAMR to approve the deal (a requirement because the combined company will do business in China) proved more time-consuming than expected. Ironically, II-VI had stated the fact that there was less overlap between its product lines and those of Coherent in comparison to Lumentum would make getting SAMR approval easier.
When the agreement was announced, II-VI estimated the combined company will have annual revenues of approximately $4.1 billion initially, with the opportunity to further penetrate a combined addressable market of approximately $25 billion. The deal will be financed via a combination of cash on hand, $5.4 billion of fully committed debt financing, and a convertible preferred equity investment of at least $1.8 billion from Bain Capital, which will reduce leverage.
For related articles, visit the Business Topic Center.
For more information on optical components and suppliers, visit the Lightwave Buyer’s Guide.
To stay abreast of optical communications technology, subscribe to Lightwave’s Enabling Technologies Newsletter.
Stephen Hardy | Editorial Director and Associate Publisher, Lightwave
Stephen Hardy is editorial director and associate publisher of Lightwave and Broadband Technology Report, part of the Lighting & Technology Group at Endeavor Business Media. Stephen is responsible for establishing and executing editorial strategy across the both brands’ websites, email newsletters, events, and other information products. He has covered the fiber-optics space for more than 20 years, and communications and technology for more than 35 years. During his tenure, Lightwave has received awards from Folio: and the American Society of Business Press Editors (ASBPE) for editorial excellence. Prior to joining Lightwave in 1997, Stephen worked for Telecommunications magazine and the Journal of Electronic Defense.
Stephen has moderated panels at numerous events, including the Optica Executive Forum, ECOC, and SCTE Cable-Tec Expo. He also is program director for the Lightwave Innovation Reviews and the Diamond Technology Reviews.
He has written numerous articles in all aspects of optical communications and fiber-optic networks, including fiber to the home (FTTH), PON, optical components, DWDM, fiber cables, packet optical transport, optical transceivers, lasers, fiber optic testing, and more.
You can connect with Stephen on LinkedIn as well as Twitter.