II-VI will enter into a definitive agreement with Coherent, allowing the Pittsburgh-based optical components and semiconductor materials manufacturer to acquire Coherent. The deal is worth around $7 billion.
Accordingly, Coherent said, it is terminating a merger agreement with Lumentum, which the two companies entered on March 9. Coherent will now pay Lumentum a termination fee of more than $200 million.
Per terms of the II-VI/Coherent merger agreement, each share of Coherent common stock will be exchanged for $220 in cash and 0.91 of a share of II-VI common stock.
Both companies, in separate press releases, said they expect the deal to close in the fourth quarter of 2021. II-VI said that it expects the combined company to generate $4.1 billion in annual revenue.
The agreement is the latest development in a multi-month acquisition saga that commenced publicly when Lumentum and Coherent entered into an initial merger agreement on Jan. 19. Since that time, Coherent has confirmed it has received 11 additional acquisition offers, including two from MKS Instruments.
Ongoing coverage of this acquisition, with analyst insights, is available on Photonics.com.
A timeline of the acquisition history:
Jan. 19: Lumentum announces agreement to acquire Coherent in $5.7 billion deal; Coherent stockholders to receive $100 per share in cash and 1.1851 shares of Lumentum common stock. Coherent is subject to a termination fee of more than $200 million if it accepts a competing bid.
Feb. 8: MKS Instruments announces unsolicited purchase bid to acquire Coherent in $6 billion deal; Coherent stockholders to receive $115 per share in cash and 0.7473 of a share of MKS common stock. Coherent announces it will enter discussions with MKS.
Feb. 12: II-VI announces unsolicited purchase bid to acquire Coherent in $6.4 billion deal; Coherent stockholders to receive $130 per in cash and 1.3055 II-VI common shares for each Coherent share.
Feb. 16: Coherent announces it will engage in discussions with II-VI.
March 8: Coherent announces its board determined a revised proposal from II-VI to be superior to terms of multiple revised Lumentum agreements, and a revised proposal from MKS. II-VI to acquire Coherent in $6.2 billion deal; Coherent stockholders to receive $170 per share in cash and 1.0981 shares of II-VI common stock.
March 8: Coherent notifies Lumentum that it intends to terminate their merger agreement unless Coherent receives a revised proposal from Lumentum by March 11.
March 8: MKS announces it is removing itself from acquisition consideration following its revised bid; MKS to acquire Coherent for $250 per share, composed of $135 in cash and $115 in shares of MKS common stock.
March 8: Lumentum announces its intent to review II-VI’s proposal.
March 12: Coherent announces that its board had determined a revised proposal from II-VI to be superior to terms of the latest Lumentum merger agreement; II-VI to acquire Coherent in a deal carrying an enterprise value of $6.8 billion. Each share of Coherent common stock to be exchanged for $195 in cash and one share of II-VI common stock.
March 17: Coherent confirms its receipt of a new proposal from Lumentum; Lumentum to acquire Coherent in a $6.9 billion deal. Each share of Coherent common stock to be exchanged for $220 in cash and 0.61 of a share of Lumentum common stock.
March 18: Coherent announces its board has determined a revised proposal from II-VI to be superior to terms of the latest Lumentum merger agreement; II-VI to acquire Coherent in a deal worth approximately $7 billion. Each share of Coherent common stock to be exchanged for $220 in cash and 0.91 of a share of II-VI common stock.
March 23: Coherent confirms its receipt of a new proposal from Lumentum; Lumentum to acquire Coherent in a deal worth approximately $7 billion. Each share of Coherent common stock to be exchanged for $230 per share in cash and 0.6724 shares of Lumentum common stock.
March 24: II-VI notifies Coherent it does not intend to amend its most recent acquisition proposal; II-VI to acquire Coherent in a deal worth approximately $7 billion. Each share of Coherent common stock to be exchanged for $220 in cash and 0.91 of a share of II-VI common stock.
March 25: Coherent announces it has accepted II-VI acquisition proposal; II-VI to acquire Coherent in a deal worth approximately $7 billion. Each share of Coherent common stock to be exchanged for $220 in cash and 0.91 of a share of II-VI common stock. Coherent to terminate its March 9 agreement with Lumentum.
*A previous figure in this article indicated Coherent has received a total of 10 acquisition offers from Lumentum, MKS Instruments, and II-VI since entering into an initial merger agreement with Lumentum on Jan. 19. This article has been updated to show Coherent has confirmed receiving 11 distinct offers since that time.