II‐VI has completed the acquisition of Coherent, forming a global company in materials, networking, and lasers.
The combined company, made up of 28,000 employees across 130 locations worldwide, will be known as 'Coherent', following a re-brand to be announced in the near future.
Coherent accepted II-VI's offer of $7.01bn in March 2021, following a bidding war with Lumentum and MKS Instruments.
Coherent had initially accepted an offer of $5.7bn from Lumentum in January of that year. However, the company received subsequent bids from MKS Instruments and II-VI.
Coherent rejected Lumentum's higher bid of $7.03bn in favour of II-VI's proposal after analysing the 'near-term and long-term financial opportunities and risks'. It agreed to pay Lumentum a $217.6 million termination fee.
Under the terms of Coherent's merger agreement with II-VI, each share of Coherent common stock was converted into the right to receive $220.00 in cash and 0.91 of a share of II-VI common stock.
The combined business will be more distributed across the value chain from materials to components, subsystems, systems, and service. II-VI’s scale, at the levels of the value chain where expertise in materials matters, is complementary to Coherent’s scale where laser systems play. The combined company will leverage that complementary scale in ways that will really matter to customers in strategic markets.
Dr Vincent Mattera Jr, chair and CEO of II-VI, said: 'Coherent is an innovator with a rich portfolio of some of the most advanced technologies in the world, which have been transformative in a broad range of markets.'
Mattera continued: 'We plan for the combined company to be named Coherent. We will soon announce the date of the launch of our new brand identity. While the name Coherent has a strong association with lasers, the broader meaning of the word is "bringing things together". It represents our diversity in thinking distilled into our clarity of purpose, our unity in action, and our broader sense of engagement by connection to our mission, vision, and values.'
The combined company will serve the four markets of industrial, communications, electronics, and instrumentation, which together represent a fast-growing total addressable market of $65 billion.
II-VI has welcomed Stephen Skaggs and Sandeep Vij, former directors of Coherent, to its board.
The combined company will be organised into three business segments. Dr Giovanni Barbarossa will continue to serve as the chief strategy officer of the company and lead the Materials Segment, previously referred to as the Compound Semiconductors Segment. Sunny Sun will continue to lead the Networking Segment, which was previously the Photonic Solutions Segment. Dr Mark Sobey, formerly the COO and executive VP of Coherent, will be the president of the new Lasers Segment.
