What is the primary purpose of these investment agreements?

The primary purpose is to inject $1 billion in capital into Coherent Corp.'s silicon carbide (SiC) business, strengthen strategic partnerships with Denso and Mitsubishi Electric, and establish supply arrangements for SiC substrates.

What is the expected impact on Coherent Corp.'s ownership of its SiC business?

Following the completion of these equity investments, Coherent Corp. is expected to own approximately 75% of its Silicon Carbide LLC subsidiary, with Denso Corporation and Mitsubishi Electric each holding a 12.5% stake.

Are there any conditions that need to be met for these investments to close?

Yes, the transactions are subject to certain closing conditions, including the obtainment or waiver of specified regulatory approvals and the successful separation of the silicon carbide business into Silicon Carbide LLC as per the agreement terms.

Will Coherent Corp. continue to supply silicon carbide substrates after these investments?

Yes, in conjunction with these agreements, Silicon Carbide LLC has agreed to enter into supply arrangements to provide 150 mm and 200 mm silicon carbide substrates to both MELCO and Denso.

COHR 8-K: Material Agreements

01—Abstract

Summary

Summary of the 8-K filed October 10, 2023. Cited figures are marked; the original filing is the authoritative source.

Coherent Corp. (COHR) has announced a significant strategic move involving its silicon carbide (SiC) business.

Through its wholly-owned subsidiary, Silicon Carbide LLC, the company has entered into two material definitive agreements with Denso Corporation and Mitsubishi Electric Corporation. These agreements entail a combined investment of $1 billion^a, with each company investing $500 million for a 12.5% stake in Silicon Carbide LLC. This transaction will result in Coherent Corp. retaining approximately 75% ownership of its SiC business.

02—Key points

Key Highlights

Coherent Corp. secures $1 billion in new capital through strategic investments in its silicon carbide business.
Denso Corporation and Mitsubishi Electric Corporation will each invest $500 million for a 12.5% ownership stake in Silicon Carbide LLC.
Post-transaction, Coherent Corp. will own approximately 75% of its silicon carbide subsidiary.
The agreements include provisions for Silicon Carbide LLC to supply SiC substrates to both Denso and MELCO.
The transactions are contingent upon regulatory approvals and the successful separation of Coherent's SiC business into the subsidiary.
The agreements contain customary representations, warranties, covenants, and indemnification clauses.

03—Questions

Frequently Asked Questions

What is the primary purpose of these investment agreements?
The primary purpose is to inject $1 billion in capital into Coherent Corp.'s silicon carbide (SiC) business, strengthen strategic partnerships with Denso and Mitsubishi Electric, and establish supply arrangements for SiC substrates.
What is the expected impact on Coherent Corp.'s ownership of its SiC business?
Following the completion of these equity investments, Coherent Corp. is expected to own approximately 75% of its Silicon Carbide LLC subsidiary, with Denso Corporation and Mitsubishi Electric each holding a 12.5% stake.
Are there any conditions that need to be met for these investments to close?
Yes, the transactions are subject to certain closing conditions, including the obtainment or waiver of specified regulatory approvals and the successful separation of the silicon carbide business into Silicon Carbide LLC as per the agreement terms.
Will Coherent Corp. continue to supply silicon carbide substrates after these investments?
Yes, in conjunction with these agreements, Silicon Carbide LLC has agreed to enter into supply arrangements to provide 150 mm and 200 mm silicon carbide substrates to both MELCO and Denso.

04—Continue

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