8-KMaterial AgreementsFinancial EventsOther Events+1

COHERENT CORP. 8-K Report, Material Agreement (Dec 10, 2021)

Filed December 10, 2021For Securities:COHR

Summary

On December 10, 2021, II-VI Incorporated (now Coherent Corp.) announced the closing of a significant financing package aimed at funding its pending acquisition of Coherent, Inc. The company successfully issued $990 million in 5.000% senior notes due 2029 and secured new credit facilities totaling $4.0 billion, comprising an $850 million Term Loan A, a $2.8 billion Term Loan B, and a $350 million revolving credit facility. These funds are earmarked for the cash consideration, repayment of existing debt, and associated fees and expenses related to the Coherent acquisition. The financing structure indicates a substantial commitment to completing the Coherent acquisition, which was previously announced in March 2021. The terms of the senior notes include provisions for redemption, with specific conditions tied to the closing of the Coherent acquisition. Notably, if the acquisition does not close by December 15, 2022, the company is obligated to redeem all outstanding notes. Investors should monitor the progress of this acquisition closely, as its completion is a critical factor influencing the company's debt obligations.

Key Highlights

  • 1II-VI Incorporated (now Coherent Corp.) issued $990 million aggregate principal amount of 5.000% senior notes due 2029.
  • 2The proceeds from the notes, along with other financing sources, will be used to fund the pending acquisition of Coherent, Inc.
  • 3The company also established new credit facilities: a $850 million Term Loan A, a $2.8 billion Term Loan B, and a $350 million revolving credit facility.
  • 4These new credit facilities are also intended to be borrowed in connection with the closing of the Coherent acquisition.
  • 5The senior notes are guaranteed by the Company's domestic subsidiaries that guarantee its existing credit agreement.
  • 6The notes carry an interest rate of 5.000% per annum, payable semi-annually.
  • 7A significant event of default includes the non-consummation of the Coherent acquisition by December 15, 2022, which would trigger a mandatory redemption of all outstanding notes.

Frequently Asked Questions

The primary purpose of the new debt issuance is to fund the cash consideration, repay certain indebtedness, and cover fees and expenses associated with the Company's pending business combination with Coherent, Inc.

The Company issued $990 million of 5.000% senior notes due 2029. Interest is payable at 5.000% per annum, semi-annually on June 15 and December 15, commencing June 15, 2022. The notes mature on December 15, 2029.

If the Coherent acquisition is not consummated by December 15, 2022, or if the company terminates the agreement, the Company is required to redeem all outstanding notes at 100% of the principal amount, plus accrued interest.

The company also announced the closing of a new Term Loan A credit facility of $850 million, a Term Loan B credit facility of $2.8 billion, and a revolving credit facility of $350 million. These facilities are also expected to be utilized in connection with the closing of the Coherent acquisition.