Lumentum announces amended transaction agreement with Coherent

Affirms commitment to uniting global industry leaders to accelerate the future of photonics.

Lumentum to acquire Coherent in a $6.6 Billion cash and stock transaction.

Expects to deliver more than $190 Million in annual run-rate synergies within 36 months of transaction close.

Expects transaction to be accretive to Non-GAAP EPS during first full year of combined operations.

Companies have received U.S. regulatory approval for transaction.

Lumentum today announced an amendment to the previously announced definitive agreement between Lumentum and Coherent entered into on January 18, 2021. Under the terms of the amended agreement, which was unanimously approved by the Boards of Directors of both companies, Lumentum will acquire Coherent in a cash and stock transaction whereby Coherent stockholders will receive $175.00 per share in cash and 1.0109 shares of Lumentum common stock for each Coherent share they own. Using Lumentum’s closing stock price as of March 9, 2021, this equates to a consideration of $261.62 per Coherent share. At closing, Coherent stockholders are expected to own approximately 24% percent of the combined company.

“Combining with Coherent helps us to diversify our business and achieve scale in important and growing markets,” said Alan Lowe, Lumentum President and CEO. “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.”

Wajid Ali, Executive Vice President and CFO, said, “By increasing the cash and lowering the stock in the consideration mix relative to our prior agreement, we are able to deliver more overall value to Coherent stockholders while at the same time increasing earnings accretion. We expect to attain annual run-rate synergies of more than $190 million within 36 months of the closing and expect the transaction to be accretive to non-GAAP earnings per share during the first full year of combined operations. We will be highly focused on exceeding our synergy targets and utilizing the combined company’s strong cash flows to de-lever and pay down the low-cost term debt we are utilizing to finance this transaction, as we did in our last major acquisition.”

Lumentum’s Board of Directors continues to recommend the transaction with Coherent to its stockholders.

Transaction terms, financing, governance and approvals

Lumentum intends to finance the cash portion of the transaction through a combination of cash on hand from the combined company’s balance sheet and $3.0 billion in new debt financing from a fully committed Term Loan B.

Two members of the Coherent Board will be appointed to the Lumentum Board, which will be expanded to nine directors, at the closing of the transaction.

The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”), expired on March 3, 2021 with respect to the proposed acquisition of Coherent. The expiration of the waiting period under the HSR Act satisfies one of the conditions to the closing of the pending transaction. The transaction is expected to close in the second half of calendar year 2021, subject to approval by Lumentum’s and Coherent’s stockholders, receipt of remaining regulatory approvals and other customary closing conditions… Full press announcement