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II-VI Inc. To Acquire Finisar In $3.2 Bln Cash, Stock Deal - Quick Facts

II-VI Inc. (IIVI), a global leader in engineered materials and optoelectronic components, has Friday agreed to acquire Finisar Corp. (FNSR), a global technology leader in optical communications, in a cash and stock transaction with an equity value of about $3.2 billion.

The strategic combination is expected to drive significant value creation through increased scale, broadened technological base, complementary product roadmaps, and leadership positions in photonics and compound semiconductors in fast-growing markets.

Under the terms of the transaction, 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 about $3.2 billion in equity value and represents a premium of 37.7 percent to Finisar's closing price on November 8, 2018. Finisar shareholders would own about 31 percent of the combined company.

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 realize run-rate cost synergies of $150 million within 36 months of closure. It is also expected to drive accretion in adjusted earnings per share for the first full year post close of about 10 percent and more than double that thereafter.

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.

Upon closing of the transaction, Dr. Mattera will continue to serve as President and CEO of the combined company. Three Finisar board members will also 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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