8-KMaterial AgreementsSecurities & ListingOther Events+1

COHERENT CORP. 8-K Report, Material Agreement (Mar 26, 2021)

Filed March 26, 2021For Securities:COHR

Summary

This 8-K filing from COHERENT CORP. (COHR) announces a material definitive agreement for the acquisition of Coherent by II-VI Incorporated. The transaction will be structured as a merger where Coherent will survive. Each share of Coherent common stock will be converted into a combination of $220.00 in cash and 0.91 shares of II-VI common stock. This represents a significant value proposition for Coherent shareholders and signals a major strategic move for both companies in the industry. The financing for this acquisition is multi-faceted, involving II-VI's balance sheet, a substantial equity investment from Bain Capital, and new debt financing. Specifically, Bain Capital will invest up to $2.1 billion in new convertible preferred stock. The transaction is subject to customary closing conditions, including regulatory approvals and stockholder approvals from both companies, but notably, it is not contingent on financing. The filing also details the treatment of Coherent's equity awards, including restricted stock units, and outlines provisions for potential termination fees under specific circumstances. Additionally, the merger agreement includes covenants for both companies to conduct business in the ordinary course and mutual recommendations from their respective boards of directors for the transaction.

Key Highlights

  • 1Coherent, Inc. to be acquired by II-VI Incorporated in a merger transaction.
  • 2Coherent shareholders will receive $220.00 in cash and 0.91 shares of II-VI common stock per Coherent share.
  • 3The transaction is financed through a combination of II-VI's cash reserves, new debt, and a significant equity investment from Bain Capital.
  • 4Bain Capital will invest up to $2.1 billion in new II-VI convertible preferred stock.
  • 5The merger agreement includes customary closing conditions such as regulatory and stockholder approvals.
  • 6The transaction is not subject to any financing condition.
  • 7The filing details the treatment of Coherent's outstanding equity awards, including accelerated vesting provisions for certain employee groups.
  • 8Termination fees are outlined, with different amounts depending on the reasons for termination and the party initiating it.

Frequently Asked Questions

The total value for Coherent shareholders is based on $220.00 in cash plus 0.91 shares of II-VI common stock per share of Coherent common stock. The exact total value will fluctuate based on the market price of II-VI's common stock at the time of closing.

II-VI plans to finance the acquisition through a combination of its existing cash, proceeds from a significant equity investment from Bain Capital in the form of convertible preferred stock, and new debt financing.

Yes, the transaction is subject to customary closing conditions, including regulatory approvals (such as HSR and approvals in China, South Korea, and Germany), stockholder approvals from both II-VI and Coherent, and the absence of certain legal impediments. However, it is not subject to any financing condition.

Coherent's restricted stock unit awards (RSUs) will be converted into time-based restricted stock units denominated in shares of II-VI common stock. The number of shares will be based on the merger consideration. Certain accelerated vesting benefits are provided for employees under specific termination conditions.