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Announcing the deal on Monday, California-based Lumentum said
the purchase was aimed at broadening its portfolio of laser
offerings and getting an edge in a fast-developing market for 3D
sensing technology.
Technology sector analysts say Lumentum is the primary supplier
of vertical-cavity surface-emitting lasers (VCSELs) that power
the Face ID feature in Apple Inc's <AAPL.O> premium iPhone X.
However, neither Apple nor Lumentum have publicly said that this
is the case.
The offer price of $9.99 per share, consisting of $5.60 in cash
and 0.0636 of a share of Lumentum common stock, represents a
premium of 27.3 percent to Oclaro's closing price of $7.85 on
Friday.
The deal is expected to generate more than $60 million of annual
run-rate synergies within 12 to 24 months of the closing of the
deal and immediately add to Lumentum's adjusted earnings per
share, the companies said in a joint statement.
Lumentum intends to fund the cash consideration with a
combination of cash on hand from the combined companies' balance
sheets and $550 million in debt financing.
Oclaro, which makes optical components for data center markets
said its stockholders are expected to own about 16 percent of
the combined company when the deal closes.
Deutsche Bank Securities served as financial adviser to Lumentum
and Wilson Sonsini Goodrich & Rosati as legal counsel while
Jefferies LLC was the financial adviser to Oclaro and Jones Day
the legal counsel.
Oclaro shares were up nearly 25 percent to $9.79 in premarket
trading.
(Reporting by Sonam Rai and Arjun Panchadar in Bengaluru;
editing by Patrick Graham)
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