What is the primary purpose of this 8-K filing for Lumentum Holdings Inc.?

This 8-K filing announces the entry into a material definitive agreement, specifically the Agreement and Plan of Merger, for Lumentum Holdings Inc. to acquire Oclaro, Inc. It provides key details about the transaction structure, consideration, financing, and conditions to closing.

What is the financial consideration Lumentum is offering for Oclaro, Inc.?

Lumentum is offering $5.60 in cash plus 0.0636 shares of Lumentum common stock for each outstanding share of Oclaro common stock, subject to potential adjustments based on the total number of Lumentum shares issued.

How will the acquisition of Oclaro be financed?

The acquisition will be financed using a combination of approximately $416 million from the combined company's balance sheets, approximately $859 million in Lumentum common stock, and approximately $550 million in new debt, which includes a committed senior secured term loan facility.

What are the key conditions that must be met for the merger to close?

Key conditions include the expiration or termination of waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act, effectiveness of a registration statement for the Lumentum shares to be issued, and approval of the merger by a majority of Oclaro's outstanding common stockholders. The transaction is not subject to a financing condition.

LITE 8-K: Acquisitions & Dispositions & Material Agreements

Summary

This Form 8-K filing from Lumentum Holdings Inc. (LITE) announces a material definitive agreement for the acquisition of Oclaro, Inc. The transaction will be structured as a two-step merger. Lumentum will acquire Oclaro in an all-stock and cash deal, where Oclaro shareholders will receive $5.60 in cash and 0.0636 shares of Lumentum common stock for each Oclaro share. This strategic acquisition aims to enhance Lumentum's position in optical networking and other high-growth markets. The deal is subject to customary closing conditions, including regulatory approvals and Oclaro shareholder approval, and is not contingent on financing. The financing for the merger is expected to come from a combination of cash on hand, new debt, and Lumentum common stock. Specifically, Lumentum plans to use approximately $416 million in cash, $550 million in new debt financing (secured via a commitment letter from Deutsche Bank), and issue approximately $859 million in Lumentum common stock. The filing also details the treatment of Oclaro's equity awards, which will be converted into Lumentum equity awards or cashed out, as applicable, at the closing of the transaction. Investors should note the potential adjustments to the exchange ratio if the aggregate number of Lumentum shares issued exceeds a certain threshold, which could result in an increase in the cash consideration per Oclaro share.

Key Highlights

1Lumentum Holdings Inc. has entered into a Merger Agreement to acquire Oclaro, Inc. in a two-step merger transaction.
2The acquisition consideration for Oclaro shareholders is a combination of cash and stock: $5.60 cash plus 0.0636 shares of Lumentum common stock per Oclaro share.
3The transaction is financed through a combination of existing cash ($416 million), new debt ($550 million), and Lumentum common stock ($859 million).
4A commitment letter for a $550 million senior secured term loan facility has been secured from Deutsche Bank.
5The deal is subject to customary closing conditions, including regulatory approvals (e.g., HSR Act) and Oclaro shareholder approval.
6The merger agreement includes provisions for termination fees under specific circumstances, with Oclaro potentially paying $63 million and Lumentum potentially paying $85 million.
7Treatment of Oclaro's equity awards (options, RSUs, restricted stock) is detailed, involving conversion into Lumentum equivalents or cash payment.

Lumentum Holdings Inc. 8-K Report, Material Agreement (Mar 12, 2018)

Summary

Key Highlights

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