II-VI has entered the race to buy laser component maker Coherent with a $6.4bn offer.
The offer of $130.00 in cash and 1.3055 shares is 10 per cent higher than the unsolicited MKS offer ad 24 per cent higher than the agreed deal with Lumtentum.
The II-VI pitch is that there is substantially less product overlap with Coherent than either Lumentum or MKS, which will make regulatory approval easier. The Lumentum deal would see the company spin off parts of its Chinese business to avoid such issues.
“The combination of II-VI and Coherent would create a uniquely strategic global leader capable of delivering to our customers the most attractive combination of photonic solutions, compound semiconductors, as well as laser technology and systems,” said Dr Vincent D. Mattera, Jr., Chief Executive Officer of II-VI. The company had previously put forward an offer for Coherent in December, but the MKS offer last week opened up the race.
“We believe now is the right time to embark on this combination given significant megatrends, with burgeoning applications in both industrial and semiconductor capital equipment segments, including those that enable consumer electronics and displays,” said Mattera. “II-VI expects to accelerate our growth in aerospace & defense, life sciences, and laser additive manufacturing by utilizing our compelling integrated solutions in lasers, optics, and electronics. With expanded capabilities, we expect to collaborate even more broadly across our customer base as their design-in leader of choice.”
The company already works with coherent, In December it signed a supply agreement for faster process development and streamlined production services for automotive laser welding applications. These include high-strength alloy welding for automotive applications and mass production copper welding for electrification applications.
“We firmly believe our proposal is far superior to Coherent’s existing merger agreement with Lumentum and the recent acquisition proposal from MKS Instruments, as it is a more