COHR Stock Price Pre-Market Jumps Over 30%: $5.7 Billion Deal With Lumentum (LITE) Confirmed

By Amit Chowdhry ● January 19, 2021
  • The stock price of Coherent, Inc. (NASDAQ: COHR) is trading at over 30%. This is why it happened.

The stock price of Coherent, Inc. (NASDAQ: COHR) is trading at over 30%. The main trigger for the stock price increase has to do with a deal being confirmed with Lumentum Holdings Inc (NASDAQ: LITE).

Lumentum Holdings is buying Coherent in a deal valued at $5.7 billion in cash and stock. Lumentum is going to pay $100 in cash at 1.1851 shares of comment stock for each Coherent share. And at closing, Coherent shares will own about 27% of the combined company. 

The combination of the companies unites Coherent’s leading photonics and lasers businesses, including in the Microelectronics, Precision Manufacturing, Instrumentation, and Aerospace & Defense markets with Lumentum’s leading Telecom, Datacom, and 3D Sensing photonics businesses, thus creating a diversified photonics technology company with significantly increased scale and market reach. And the combination accelerates Lumentum’s penetration of the $10+ billion market for lasers and photonics outside of the communications and 3D sensing applications. 

And the combined company is going to be better positioned to serve the needs of a global customer base increasingly dependent on photonics to enable important end-market transitions including the shift to digital and virtual approaches to work and life, the transition to 5G in wireless networking, advanced bioinstrumentation, advanced microelectronics, and new materials for next generation consumer electronic devices, flat panel and OLED displays, communications equipment, electric and autonomous vehicles, and energy storage.

KEY QUOTES:

“Today’s announcement is an important advancement of Lumentum’s strategy. In our five years as a standalone public company, we have focused on developing the most innovative products and technology in our industry and partnering with market leading customers to help them compete and win in their markets. As we look ahead, we are thrilled to join forces with Coherent to create one of the world’s largest and most diverse photonics technology companies with leading positions in the growing market for photonics. Coherent brings one of the most recognizable and respected brands in the photonics industry and a very talented and innovative team. By increasing our scale, expanding our portfolio, and bolstering our R&D capabilities at a time when global markets are increasingly relying on photonics products and technologies, we are confident in our combined ability to pursue exciting new growth opportunities.

“Together, we expect to increase the pace of innovation, and to be at the forefront of the long-term market trends that are dependent on the capabilities of photonics. The combined company will also have a strong financial profile with a diversified revenue mix and significant synergy opportunities that will deliver enhanced value to our stockholders. We look forward to welcoming Coherent’s talented employees to the team and are confident in our ability to execute a smooth integration focused on supporting both companies’ employees and customers. As I often say, the future is truly bright at Lumentum – and with the addition of Coherent, it is even brighter.”

— Alan Lowe, Lumentum President and CEO

“We are excited about the combination of Lumentum and Coherent, two iconic brands in their respective photonics markets. We anticipate the combined complementary product portfolio, breadth of customer application knowledge, and R&D capabilities, all based on photonics, will accelerate innovation and adoption of photonics across the many markets that we serve. We are excited to bring Coherent’s strength in OLED display manufacturing, semiconductor wafer inspection and life science instrumentation to Lumentum’s portfolio, to name but a few of the key applications we serve, and believe Lumentum’s expertise and scale in world class photonics components and systems will accelerate Coherent’s vertical integration and addressable market expansion in several high growth areas, such as directed energy in defense and precision battery welding in automotive. We look forward to contributing to a customer-centric, innovative culture with a track record of operational excellence. We are also pleased to deliver immediate and substantial value to our stockholders, as well as meaningful participation in the long-term growth opportunities created by the combined company. Today’s announcement is a testament to the hard work and dedication of the Coherent team to put us in an industry-leading position, and I look forward to working closely with Alan and the Lumentum team on a smooth transition.”

— Andy Mattes, Coherent President and CEO