- January 20, 2021
- Posted by: Stratford Team
- Category: Markets
- Coherent stock spiked 33% Tuesday after Lumentum announced it will acquire the rival laser maker for $5.7 billion.
- Shares of Lumentum fell on the news, losing almost $900 million in market cap versus Friday’s closing figures.
- Both companies are rated favorably by analysts, boasting a combined 18 “buy” ratings versus just two “sell” ratings.
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The $5.7 billion acquisition will see Coherent shareholders receive $100 and 1.1851 shares of Lumentum stock for each Coherent share.
Following the closing of the deal, Coherent stockholders are expected to own around 27% of the combined company. Two members of the Coherent board will also be appointed to the Lumentum board.
<blockquote class=”twitter-tweet”><p lang=”en” dir=”ltr”><a href=”https://twitter.com/Lumentum?ref_src=twsrc%5Etfw”>@Lumentum</a> and <a href=”https://twitter.com/CoherentInc?ref_src=twsrc%5Etfw”>@CoherentInc</a> are combining in a transaction that will unite two global industry leaders to accelerate the future of photonics. Read more here: <a href=”https://t.co/9yBbaWymNA”>https://t.co/9yBbaWymNA</a> <a href=”https://t.co/vJp2yp4lW1″>pic.twitter.com/vJp2yp4lW1</a></p>— Lumentum (@Lumentum) <a href=”https://twitter.com/Lumentum/status/1351494115649859584?ref_src=twsrc%5Etfw”>January 19, 2021</a></blockquote> <script async src=”https://platform.twitter.com/widgets.js” charset=”utf-8″></script>
Founded in 1966, Santa Clara-based Coherent focuses on lasers and related light-emitting products used in medical equipment, industrial applications, and semiconductor manufacturing.
Tuesday’s deal will combine Coherent with San Jose-based Lumentum, a rival photonics company that creates optical components used in cloud networking, data transmission, and submarine communications.
Andy Mattes, Coherent president and CEO, said in a recent press release that he believes Coherent’s “complementary product portfolio, breadth of customer application knowledge, and R&D capabilities” will help to “accelerate innovation and adoption of photonics” across the markets the two laser makers service.
Mattes continued, “we are excited to bring Coherent’s strength in OLED display manufacturing, semiconductor wafer inspection, and life science instrumentation to Lumentum’s portfolio.”
Coherent stock now trades at over $200 per share and boasts a market cap of $4.93 billion as of Tuesday morning. The laser maker gained over $1 billion in market value versus Friday’s closing mark of $3.7 billion.
Lumentum, on the other hand, saw shares fall around 11% Tuesday following news of the deal. The company erased $900 million in market cap versus Friday’s close.
Coherent currently holds seven “buy” ratings, one “neutral” rating, and one “sell” rating from analysts, while Lumentum holds 11 “buy” ratings and one “sell” rating.