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2 - 3 Feb 2019
San Francisco, CA, United States


375 Saxonburg Blvd
Saxonburg, PA
United States
Company Description
II-VI Incorporated, a global leader in engineered materials and optoelectronic components, is a vertically integrated manufacturing company that develops innovative products for diversified applications in the industrial, optical communications, military, life sciences, semiconductor equipment, and consumer markets. The Company has research and development, manufacturing, sales, service, and distribution facilities worldwide. For more information, please visit us at www.ii-vi.com
26 November 2018
II-VI Incorporated to Acquire Finisar, Creating Transformative Strategic Combination with Leading Positions in Photonics and Compound Semiconductors
II-VI Incorporated to Acquire Finisar, Creating Transformative Strategic
Combination with Leading Positions in Photonics and Compound Semiconductors
• Strategic combination expected to drive significant value creation through increased
scale, broadened technological base, complementary product roadmaps, and leadership
positions in fast-growing markets
• $150 million of expected run-rate cost synergies realized within 36 months of close
• Transaction expected to drive accretion in Non-GAAP earnings per share for the first full
year post close of approximately 10% and more than double that thereafter
• II-VI and Finisar to host conference call today at 8:00 AM ET to discuss transaction
PITTSBURGH & SUNNYVALE, Calif., November 9, 2018 (GLOBE NEWSWIRE) – II-VI Incorporated
(NASDAQ:IIVI), a global leader in engineered materials and optoelectronic components, and
Finisar Corporation (NASDAQ: FNSR), a global technology leader in optical communications,
today 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
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 0.2218x 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 billion 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 70 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
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.”
Compelling Strategic Rationale
As a combined company, II-VI and Finisar will continue to leverage their leading-edge
innovation and commercialization of complex technologies to maximize value through vertical
integration and manufacturing scale. The core competencies of the two companies in
innovation and manufacturing will complement each other at all levels of the value chain,
including in the following strategic areas:
• A Stronger Position in Optical Communications: The combined company will provide a
full line and scalable supply of high performance Datacom transceivers, products based
on coherent transmission technology and ROADM solutions based on more than 30
years of industry leadership. It will market products into next-generation undersea,
long-haul and metro networks, hyperscale datacenters and in 5G optical infrastructure.
• Compelling Platform for 3D Sensing & LiDAR: The combined optoelectronics technology
leadership based on GaAs and InP compound semiconductor laser design platforms,
together with one of the world’s largest 6-inch vertically integrated epitaxial growth and
device fabrication manufacturing platforms, will enable faster time to market for a
greater number of opportunities in 3D sensing and LiDAR.
• Combined Capabilities Unlock Access to Larger Markets: The broad portfolio of
differentiated engineered materials, including GaAs, InP, SiC, GaN and diamond
together with a critical mass of optoelectronic, optical and integrated circuit device
design expertise and related intellectual property, will unlock access to larger markets in
RF devices for next-generation wireless and military applications, as well as power
electronics for electric cars and green energy.
• Maximizing Value Creation through Vertical Integration: Deep vertical integration of
core technologies ranging from engineered materials to high value-add solutions,
enabled by differentiated components, will provide the combined company with a
strong foundation to capitalize on a broad range of emerging opportunities while
making the overall markets even more competitive.
Driving Enhanced Financial Performance
In addition to the compelling strategic benefits, the combination of II-VI and Finisar will:
• Accelerate Revenue Growth: On a pro forma basis, the combined company had
approximately $2.5 billion of annual revenue. The combined broad base of talent,
technology and manufacturing is expected to enhance the ability to better address nearto
medium-term opportunities and accelerate revenue growth.
• Provide Significant Synergy Potential: The combined company expects to realize $150
million of run-rate cost synergies within 36 months of closing. Synergies are expected to
be achieved from procurement savings, internal supply of materials and components,
efficient research and development, consolidation of overlapping costs and sales and
marketing efficiencies.
• Strengthen Earnings Accretion: The transaction is expected to drive accretion in NonGAAP
earnings per share for the first full year post close of approximately 10% and more
than double that thereafter.
Transaction Details
II-VI intends to fund the cash consideration with a combination of cash on hand from the
combined companies' balance sheets and $2 billion in funded debt financing. The transaction is
expected to close in the middle of calendar year 2019, subject to approval by each company’s
shareholders, antitrust regulatory approvals and other customary closing conditions.
Management and Board of Directors
Upon closing of the transaction, Dr. Mattera will continue to serve as President and CEO of the
combined company.
In addition, in connection with the closing of the transaction, three Finisar board members will
be appointed to the II-VI Board, which will be expanded to 11 directors.
BofA Merrill Lynch served as the exclusive financial advisor to II-VI, and K&L Gates LLP and
Sherrard, German and Kelly, P.C. served as legal advisors to II-VI. Barclays served as exclusive
financial advisor to Finisar and O’Melveny & Myers LLP served as legal advisor to Finisar.
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