II-VI revises proposal to acquire Coherent

II-VI Incorporated (IIVI) delivered to Coherent Inc.'s (COHR) Board of Directors on March 5, 2021 a revised proposal to acquire all outstanding shares of Coherent in a cash and stock transaction. Under the terms of the revised proposal, Coherent's shareholders would receive $170.00 in cash and 1.0981 II-VI common shares for each Coherent share, which implies a total enterprise value of $6.5B and total per share consideration of $260.00 based on the 10-day volume weighted average price of II-VI shares as of March 5, 2021. Coherent's Board of Directors has informed II-VI that it deems II-VI's revised proposal superior to Coherent's merger agreement with Lumentum Holdings (LITE). II-VI's revised proposal includes multiple enhancements from its February 12, 2021 offer, including fully committed debt financing from J.P. Morgan Securities LLC and a $1.5B equity investment by an affiliate of Bain Capital in the combined company. The Bain Capital investment will allow the company to significantly reduce leverage. Pro forma for the transaction, II-VI anticipates total debt of approximately $4.2B and net debt of approximately $3.7B at closing. In connection with the investment, Steve Pagliuca, Co-Chairman of Bain Capital, is expected to join the II-VI board upon closing. Following extensive due diligence, II-VI now expects the combined companies to achieve run-rate cost synergies of $250M annually within 36 months, with approximately 60% from cost of goods sold and 40% from operating expenditures. II-VI continues to expect the transaction will be accretive to non-GAAP EPS in the second year following closing.