II-VI to Acquire Finisar

II-VI, a global leader in engineered materials and optoelectronic components, and Finisar, a global technology leader in optical communications, announced that they have entered into a definitive merger agreement under which II-VI will acquire Finisar in a cash and stock transaction with an equity value of approximately 3.2 billion dollars.

II-VI and Finisar create a transformative strategic combination with leading positions in photonics and compound semi­con­ductors. (Source: II-VI)

Under the terms of the merger agreement, which has been unanimously approved by the boards of directors of both companies, Finisar’s stockholders will receive, on a pro-rated basis, $ 15.60 per share in cash and 0.2218× shares of II-VI common stock, valued at $ 10.40 per share based on the closing price of II-VI’s common stock of $ 46.88 on November 8, 2018. The transaction values Finisar at $ 26.00 per share, or approximately $ 3.2 B in equity value and represents a premium of 37.7 % to Finisar’s closing price on November 8, 2018. Finisar shareholders would own approximately 31 % of the combined company.

The combination of II-VI and Finisar would unite two innovative, industry leaders with complementary capabilities and cultures to form a formidable industry leading photonics and compound semiconductor company capable of serving the broad set of fast growing markets of communications, consumer electronics, military, industrial processing lasers, automotive semiconductor equipment, and life sciences. Together, II-VI and Finisar will employ over 24,000 associates in seventy locations worldwide upon closing of the transaction.

“Disruptive megatrends driven by innovative uses of lasers and other engineered materials present huge growth opportunities for both of our companies,” said Dr. Vincent D. Mattera, Jr., president and CEO, II-VI Incorporated. “In communications, materials processing, consumer electronics, and automotive, we expect that the combination with Finisar will allow us to leverage our combined technology and intellectual property in InP, GaAs, SiC, GaN, SiP, and diamond to achieve faster time to market, cost and scale. Together, we believe that we will be better strategically positioned to play a strong leadership role in the emerging markets of 5G, 3D sensing, cloud computing, electric and autonomous vehicles, and advanced microelectronics manufacturing.”

Dr. Mattera continued, “We have long admired Finisar and have a great deal of regard for its founders and its talented global team. Our companies both have a long history of focusing on innovation, breakthrough solutions and competitive follow-through by manufacturing high quality products for our customers, and we look forward to welcoming Finisar to the II-VI family and further strengthening our competitive position in the industry.”

“The combination of our state-of-the-art technology platforms, deep customer relationships, great assets, and amazing talent will enhance our ability to hit market windows that won’t stay open for long,” said Michael Hurlston, Finisar’s CEO. “This combination will accelerate our collective growth and will take advantage of the technology, products and manufacturing expertise that Finisar has uniquely developed over the course of its 30-year history.”

Mr. Hurlston added, “We are extremely excited to combine Finisar with II-VI and together create a leader in photonics and compound semiconductors across all of the markets we serve. We are confident that the growth potential for the combined company is substantial, and we believe that our respective shareholders will be able to enjoy significant potential for value creation when the transaction is completed.” (Source: II-VI)

Links: Finisar Corporation, Sunnyvale, California, USA • Business Units overview, II-VI Incorporated, Saxonburg, Penn., USA

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