Coherent Sells Aerospace and Defense Business to Private Equity Firm
Coherent has entered into an agreement to sell its Aerospace and Defense business to private equity investor, Advent, in a deal worth $400 million. The photonics industry leader said that it plans to use proceeds from the sale to reduce debt, which will be immediately accreditive to its earnings per share.
Coherent made the announcement concurrent with its release of its fourth quarter and full year fiscal reports.
According to company CEO Jim Anderson, the move comes as part of a strategic portfolio optimization process, as the company concentrates its focus on core growth markets and products. Coherent will continue to build on its data center and communications segment, as well as other higher-margin photonics technologies, Anderson said.
Long-term debt is still notable for the company, standing at nearly $3.5 billion. This value stems largely from the company's 2022 acquisition of Coherent, which it made while operating as II-VI.
For the 2025 fiscal year, Coherent’s Aerospace and Defense business posted lower profit margins than the company’s average, with sales of $200 million. The division develops advanced systems for satellite and space, navigation and sensing, intelligence and surveillance, directed energy, and future warfighter technology. The company said that the business includes approximately 550 employees and 10 geographic sites.
Coherent posted fourth-quarter growth of more than 16% year-over-year with $1.53 billion in revenue, compared to $1.31 billion in 2024. Revenue for the full year was a record setting $5.81 billion, more than $1 billion higher than the $4.7 billion earned from the previous years.
Coherent projects revenue for the upcoming quarter to be between $1.4 billion and $1.6 billion. On Aug. 7, Coherent extended an agreement with Apple to supply VCSELs for iPhones and iPads. This agreement is expected to boost revenue in and for the 2026 fiscal year.
Upon the deal's close, Advent will rename the business. Advent managing partner, Shonnel Malani, said that the firm plans to invest significantly in R&D to propel the business’ market position in advanced laser and optical solutions. The firm said that it sees potential to turn the acquired unit into a standalone entity.
Founded in 1984, Advent overseas more $94 billion in assets under its management. It led Ayar Labs' series D financing round last year, in which Ayar Labs raised $155 million.
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