ANDOVER, Mass., Feb. 08, 2021 (GLOBE NEWSWIRE) -- MKS Instruments, Inc. (NASDAQ: MKSI), a global provider of technologies that enable advanced processes and improve productivity, today confirms it has made an offer to acquire Coherent, Inc. in a cash and stock transaction. Based on the closing price of MKS stock on February 4, 2021, MKS’ proposal is valued at approximately $240 per share of Coherent stock, representing a premium of approximately 16% to the implied value of Coherent’s merger agreement with Lumentum, based on the closing price per share of Lumentum stock on February 4, 2021, and a premium of 58% over the closing price of Coherent stock on January 15, 2021, the last trading day before the announcement of Coherent’s proposed transaction with Lumentum.
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 John T.C. Lee, President and CEO of MKS.
Under the terms of MKS’ proposal, which was conveyed in an offer letter to Coherent’s board of directors on February 4, 2021, Coherent shareholders would receive $115 cash and .7473 of a share of MKS common stock per share of Coherent common stock. MKS intends to fund the transaction with cash on hand and debt financings. The execution of a definitive merger agreement between Coherent and MKS would be subject to approval of each party’s board of directors and completion of the transaction would be subject to customary closing conditions, including receipt of required regulatory approvals and approval of MKS’ and Coherent’s respective stockholders. Completion of the transaction would not be subject to any financing condition.
Lazard and Barclays are acting as MKS’ financial advisors and WilmerHale LLP is serving as MKS’ legal advisor. Barclays is providing committed debt financing for the proposed transaction.
Letter to Coherent’s Board of Directors
February 4, 2021
Board of Directors
Coherent Inc.
5100 Patrick Henry Drive
Santa Clara, CA 95054
Re: Potential Combination with Coherent Inc.
To the Members of the Board:
MKS Instruments, Inc. (“MKS”) has appreciated the opportunity to discuss a combination with Coherent Inc. (“Coherent” or the “Company”) over the past 12 months. We emphatically believe that aligning the technology offerings of Coherent and MKS would create a global leader in lasers and photonics providing our customers a truly complementary portfolio which reflects both the breadth and depth of our combined resources.
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 $240 per share, representing a transaction value of $6 billion. Our current proposal is comprised of a) $115 in cash and b) 0.7473 of a share of MKS common stock for each outstanding share of Coherent common stock reflecting a value of $125 as of today’s market close.
Not only does our proposal provide $850 million in incremental value to Coherent’s shareholders above the proposed Lumentum transaction, currently valued at $206.13 per Coherent share, and a premium of 16% to Lumentum’s proposal, we are also providing a materially larger cash component of $115 versus $100 per Coherent share in Lumentum’s offer. Our proposal clearly represents a “Company Superior Proposal” as defined in your merger agreement with Lumentum with a premium of 23% to Coherent’s closing price today and a 58% premium to January 15, 2021, the last trading day prior to the announcement of your proposed transaction with Lumentum.
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 Barclays Capital, our lead financing source, covering the full amount of cash required for this transaction. We would intend to complete confirmatory due diligence within 10 days of your making available to us the same non-public information that was made available to Lumentum and to sign and announce a transaction shortly thereafter.
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 Mike Murray of Lazard at either [REDACTED] or [REDACTED].
Best regards,
/s/ John T.C. Lee
John T.C. Lee
President and Chief Executive Officer
Attachments
cc: Mike Murray, Lazard
About MKS Instruments
MKS Instruments, Inc. is a global provider of instruments, systems, subsystems and process control solutions that measure, monitor, deliver, analyze, power and control critical parameters of advanced manufacturing processes to improve process performance and productivity for our customers. Our products are derived from our core competencies in pressure measurement and control, flow measurement and control, gas and vapor delivery, gas composition analysis, electronic control technology, reactive gas generation and delivery, power generation and delivery, vacuum technology, lasers, photonics, optics, precision motion control, vibration control and laser-based manufacturing systems solutions. We also provide services relating to the maintenance and repair of our products, installation services and training. Our primary served markets include semiconductor, industrial technologies, life and health sciences, research and defense. Additional information can be found at www.mksinst.com.
