Summary
Lumentum Holdings Inc. (LITE) announced a significant development on January 19, 2021, with the filing of an 8-K detailing a definitive merger agreement to acquire Coherent, Inc. The transaction, structured as a two-step merger, will see Coherent shareholders receive a combination of cash and Lumentum common stock. This strategic acquisition aims to enhance Lumentum's market position and expand its product portfolio. The deal is valued at approximately $5.7 billion, considering the cash and stock components and assuming Coherent's current market capitalization. Lumentum plans to finance the acquisition through a mix of existing cash reserves, the issuance of its common stock, and new debt financing, including a $2.1 billion term loan facility. The transaction is subject to customary closing conditions, including regulatory approvals, stockholder approvals from both companies, and other standard conditions, and is not contingent on financing.
Key Highlights
- 1Lumentum to acquire Coherent, Inc. in a $5.7 billion merger agreement.
- 2Coherent shareholders will receive $100.00 in cash and 1.1851 shares of Lumentum common stock per share of Coherent common stock.
- 3The acquisition will be financed through existing cash, Lumentum stock, and approximately $2.1 billion in new debt, including a committed term loan facility.
- 4The transaction structure involves a two-step merger process.
- 5Both Lumentum and Coherent's Boards of Directors have unanimously approved the merger agreement.
- 6Closing conditions include regulatory approvals (including HSR, China, and South Korea), stockholder approvals from both companies, and other customary conditions.
- 7Termination fees are outlined, with Coherent potentially paying $217.6 million and Lumentum potentially paying $337.7 million (or $279 million in specific antitrust scenarios).