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COHERENT CORP. 8-K Report, Material Agreement (Jan 4, 2010)

Filed January 4, 2010For Securities:COHR

Summary

II-VI Incorporated (now Coherent Corp.) announced the completion of its acquisition of Photop Technologies, Inc. on January 4, 2010. This strategic merger, effective December 28, 2009, involves a cash and stock consideration totaling approximately $76 million ($45.6 million in cash and $30.4 million in II-VI Shares, subject to adjustments). The acquisition is expected to enhance II-VI's capabilities and market position. The transaction included specific lock-up periods for the shares issued to Photop shareholders, with 50% subject to a six-month lock-up and the other 50% subject to a twelve-month lock-up, aimed at ensuring stability post-acquisition. Additionally, there are potential earnout opportunities for Photop shareholders based on future financial performance, capped at $12 million. The completion of the merger was contingent upon several key conditions, including the satisfaction of Photop's existing credit facilities, termination of its stock incentive plan, and the resolution of related-party transactions. II-VI has also committed to establishing a retention program valued at $5 million for key Photop personnel. The company also updated its fiscal year 2010 guidance in conjunction with this announcement, signaling confidence in the integration and future performance of the combined entity.

Key Highlights

  • 1II-VI Incorporated has successfully completed the acquisition of Photop Technologies, Inc.
  • 2The acquisition involves an initial consideration of approximately $45.6 million in cash and $30.4 million in II-VI common stock.
  • 3Photop shareholders may be eligible for an additional $12 million in earnout payments based on future performance.
  • 4A significant portion of the II-VI shares issued will be subject to lock-up periods of six to twelve months.
  • 5The transaction includes a retention program valued at $5 million to incentivize key Photop employees.
  • 6The merger completion was subject to several conditions, including the settlement of Photop's outstanding debt and liens.
  • 7II-VI Incorporated updated its fiscal year 2010 guidance following the acquisition announcement.

Frequently Asked Questions

The initial consideration for the acquisition is approximately $45.6 million in cash, plus a value of $30.4 million in II-VI common stock, which is subject to certain adjustments based on the trading price of II-VI shares. Additionally, there are potential earnout payments of up to $12 million based on Photop's future financial performance.

Yes, 50% of the II-VI shares issued will be subject to a six-month lock-up period, and the remaining 50% will be subject to a twelve-month lock-up period. During these periods, shareholders will not be permitted to sell or transfer these shares.

Key conditions included the satisfaction of all outstanding amounts due under Photop's existing credit facilities and the release of associated liens, the repurchase and termination of Photop's stock incentive plan, the termination of related-party arrangements, and certain representations and warranties from both parties.

Yes, the press release accompanying this filing indicates that II-VI Incorporated updated its fiscal year 2010 guidance concurrently with the announcement of the acquisition's completion.