The company crashed the takeover of the company by Lumentum with a $6.4bn bid back in February. Since then the share price has fallen.
The new proposal sees Coherent’s shareholders receive $170.00 in cash, up from $130.00, and 1.0981 II-VI common shares for each Coherent share, worth a total of $260.00.
Coherent’s Board of Directors has informed II-VI that it sees II-VI’s revised proposal as superior to Coherent’s merger agreement with Lumentum and a rival bid by MKS Instruments that triggered the takeover battle.
II-VI has raised debt financing from J.P. Morgan Securities and a $1.5 billion equity investment by an affiliate of Bain Capital in the combined company. The Bain Capital investment will allow the company to significantly reduce the amount of debt the company takes on, and CEO Steve Pagliuca will join the board of the new company.
II-VI expects to make more savings than expected from the combined companies, saving $250m a year within 36 months, with approximately 60 percent from economies of scale in reducing the cost of the optical systems sold and 40 percent from reducing operating expenditures.
“We are pleased that Coherent’s Board has deemed our offer a Company Superior Proposal and we stand ready to execute a merger agreement in the coming days,” said Dr Vincent Mattera, Chief Executive Officer of II-VI. “Together, II-VI and Coherent will leverage our combined technology platforms for a broad range of laser-enabled end markets, while fulfilling our vision of a world transformed through innovations vital to a better life today and sustainability of future generations. In particular, the combination will allow us to accelerate our growth by offering compelling integrated laser solutions for electric vehicle production lines, laser additive manufacturing, aerospace & defence, and life sciences.”
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