Shares of laser maker Coherent jumped on Tuesday, after Lumentum Holdings agreed to acquire the company in a deal valued at $5.7 billion.
In a cash-and-stock deal, Coherent shareholders would receive $100 per share in cash and 1.1851 shares of Lumentum common stock for each Coherent share they own, according to the the companies’ statement. The transaction deal implies a 49% premium to Coherent's closing price on Friday. Coherent shareholders will own 27% of the combined entity, upon the deal’s closing.
The deal is expected to close in the second half of 2021.
The deal "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, creating a diversified photonics technology company with significantly increased scale and market reach," the companies said in a joint statement.
The deal is expected to boost earnings in the first year after closing and to create more than $150 million in annual run-rate synergies.