Optical communications component company and Apple supplier Finisar has been bought by II-VI in a cash and stock deal valued at USD 3.2 billion, or around USD 26 per share. The merger has already been unanimously approved by the board of directors at Finisar, as well as of II-VI, which produces engineered materials as well as optical parts and systems.
Under the terms of the deal, Finisar shareholders will get, on a pro-rated basis, USD 15.60 per share in cash and 0.2218 shares of II-VI stock. The deal puts a premium of 37.7 percent to Finisar’s closing price on 8 November. At the end of the show, shareholders will own about 31 percent of the combined company, set to become a leading photonics and compound semiconductor company serving the communications, consumer electronics, military, industrial processing lasers, automotive, semiconductor equipment and life sciences markets.
The transaction is also expected to maximize value creation through vertical integration and push financial performance. In this regard, the combined company expects to get USD 150 million of run-rate cost synergies within 36 months of closing. It will also increase adjusted earnings per share by 10 percent for the first full year post close and more than double that thereafter. Finally, it is expected to unlock access to larger markets: together, II-VI and Finisar will employ over 24,000 associates in 70 locations across the world.
At close, three Finisar board members will be appointed to the II-VI board, which will be expanded to 11 directors. II-VI said it will fund the acquisition through a combination of cash on hand and USD 2 billion in funded debt financing.
