Shares of laser solution provider Coherent, Inc. (COHR) are surging more than 35% Tuesday morning after Lumentum Holdings Inc. agreed to buy the company in a $5.7 billion cash and stock deal.
Lumentum Holdings Inc. manufactures and sells optical and photonic products.
As per the deal, Coherent stockholders will get $100 per share in cash and 1.1851 shares of Lumentum common stock for each Coherent share they own, the company said.
On completion of the deal, Coherent stockholders are expected to own about 27% percent of the combined company.
The combination of the companies is expected to deliver more than $150 million in annual run-rate synergies within 24 months of transaction close, and be accretive to adjusted earnings per share during the first full year after closing.
"The combination 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 combination accelerates Lumentum's penetration of the more than $10 billion market for lasers and photonics outside of the communications and 3D sensing applications," Coherent said.
In a separate release, Coherent provided first quarter preliminary revenue in the range of $325 - $327 million. This compares with $313.09 million estimated by analysts polled by Thomson Reuters.
COHR touched a new high of $213.05 this morning.
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