MKS Instruments Makes Superior Offer to Acquire Coherent
Implied Value of Approximately
- Creates a global leader in photonics to accelerate customer solutions
- Offer represents 16% premium over implied value of Lumentum transaction
- Expected to be accretive to Non-GAAP earnings per share within 12 months of close
- Anticipated synergies of
$180Mwithin 36 months of close
MKS believes its proposal offers compelling strategic and financial benefits for the stockholders of both MKS and Coherent and constitutes a “Company Superior Proposal” as defined in Coherent’s merger agreement with Lumentum.
“We believe this transaction would create a global photonics leader with a world-class technology portfolio, proven operational capabilities, deep customer relationships and a track record of sustainable and profitable growth, uniquely positioned to solve our customers’ most difficult challenges. We believe the combination of MKS and Coherent would drive growth and shareholder value through increased technology investment that creates new solution platforms and accelerates innovation within the industry, as well as meaningful synergies”, said
Under the terms of MKS’ proposal, which was conveyed in an offer letter to Coherent’s board of directors on
Lazard and Barclays are acting as MKS’ financial advisors and
Letter to Coherent’s Board of Directors
Board of Directors
Re: Potential Combination with Coherent Inc.
To the Members of the Board:
Notwithstanding your decision to enter into exclusive negotiations and ultimately execute a definitive merger agreement with Lumentum before we had the opportunity to present our case for a compelling transaction for your shareholders, we remain very enthusiastic and steadfast about a combination between Coherent and MKS. As such, we are pleased to submit this proposal to acquire all the outstanding shares of Coherent common stock at a price of
Not only does our proposal provide
To further help you appreciate the high level of deal certainty that we offer, we have included with this letter a proposed merger agreement which is substantially identical to the terms of your announced merger agreement with Lumentum, with only those changes necessary to reflect the terms of our proposal, and a financing commitment letter from
We strongly believe that the combination of Coherent and MKS represents a more logical and compelling equity story for both parties’ shareholders and customers and we look forward to working with you to realize the potential upside. Based on the rationale I have presented, I sincerely hope we are able to bring our two companies together with this transaction.
The proposal set forth in this letter supersedes any and all prior proposals made by MKS to Coherent and/or discussions between the parties.
If you have any questions about this proposal or require clarification, please feel free to contact me at either [REDACTED] or [REDACTED] or
President and Chief Executive Officer
About MKS Instruments
Safe Harbor For Forward-Looking Statements
Statements in this press release regarding the proposed transaction between MKS and Coherent, future financial and operating results, benefits and synergies of the transaction, financing for the transaction, future opportunities for the combined company and any other statements about MKS managements’ future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words “will,” “projects,” “intends,” “believes,” “plans,” “anticipates,” “expects,” “estimates,” “forecasts,” “continues” and similar expressions) should also be considered to be forward-looking statements. These statements are only predictions based on current assumptions and expectations. Actual events or results may differ materially from those in the forward-looking statements set forth herein. Among the important factors that could cause actual events to differ materially from those in the forward-looking statements are: the ultimate outcome of discussions between MKS and Coherent, including the possibilities that MKS will not pursue a transaction with Coherent or that Coherent will reject a transaction with MKS; the ability of the parties to complete a transaction; the risk that the conditions to the closing of any transaction, including receipt of required regulatory approvals and approval of MKS’ and Coherent’s respective stockholders, are not satisfied in a timely manner or at all; litigation relating to the transaction; unexpected costs, charges or expenses resulting from the transaction; the risk that disruption from the proposed transaction materially and adversely affects the respective businesses and operations of MKS and Coherent; the ability of MKS to realize the anticipated synergies, cost savings and other anticipated benefits of the proposed transaction, including the risk that the anticipated benefits from the proposed transaction may not be realized within the expected time period or at all; potential adverse reactions or changes to business relationships resulting from the announcement, pendency or completion of the transaction; the ability of MKS to retain and hire key employees; legislative, regulatory and economic developments; changing conditions affecting the markets in which MKS operates, including the fluctuations in capital spending in the semiconductor industry and other advanced manufacturing markets; fluctuations in sales to MKS’ and Coherent’s existing and prospective customers; the impact of the COVID-19 pandemic on the global economy and financial markets, including any restrictions on MKS’ or Coherent’s operations and the operations of their respective customers and suppliers resulting from public health requirements and government mandates; the terms of MKS’ term loan and the availability and terms of the financing to be incurred in connection with the transaction; competition from larger or more established companies in MKS’ and Coherent’s respective markets; MKS’ ability to successfully grow the businesses of the combined company; the challenges, risks and costs involved with integrating the businesses of MKS and Coherent; potential fluctuations in quarterly results; dependence on new product development; rapid technological and market change; acquisition strategy; manufacturing and sourcing risks; volatility of stock price; international operations; financial risk management; and the other factors described in MKS’ most recent Form 10-K and any subsequent Form 10-Q reports filed by MKS with the
Additional Information and Where to Find It
This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. This communication relates to a proposal which MKS has made for a business combination transaction with Coherent. In furtherance of this proposal and subject to future developments, MKS (and, if a negotiated transaction is agreed to, Coherent) may file one or more registration statements, prospectuses, proxy statements or other documents with the
Participants in the Solicitation
MKS and certain of its directors and executive officers may be deemed to be participants in any solicitation with respect to the proposed transaction under the rules of the
Vice President, Investor Relations
Telephone: (978) 557-5180
Source: MKS Instruments, Inc.