Item 1.01. Entry into a Material Definitive Agreement.
Merger Agreement
On January 18, 2021, Lumentum Holdings Inc., a Delaware corporation
("Lumentum"), Coherent, Inc., a Delaware corporation ("Coherent"), Cheetah
Acquisition Sub, Inc., a Delaware corporation and a wholly owned subsidiary of
Lumentum ("Merger Sub I"), and Cheetah Acquisition Sub LLC, a Delaware limited
liability company and a wholly owned subsidiary of Lumentum ("Merger Sub II"),
entered into an Agreement and Plan of Merger (the "Merger Agreement").
Pursuant to the terms of the Merger Agreement, the acquisition of Coherent will
be accomplished through a merger of Merger Sub I with and into Coherent (the
"First Merger"), with Coherent surviving the First Merger, followed by a merger
of Coherent with and into Merger Sub II, with Merger Sub II continuing as the
surviving entity (the "Second Merger," and taken together with the First Merger,
the "Mergers").
Pursuant to the terms of the Merger Agreement, and subject to the terms and
conditions set forth therein, at the effective time of the First Merger (the
"Effective Time"), each share of the common stock of Coherent (the "Coherent
Common Stock") issued and outstanding immediately prior to the Effective Time
(other than (x) shares of Coherent Common Stock owned by Lumentum, Coherent, or
any direct or indirect wholly owned subsidiary of Lumentum or Coherent or (y)
shares of Coherent Common Stock owned by stockholders who have properly
exercised and perfected appraisal rights under Delaware law, in each case
immediately prior to the Effective Time, will be cancelled and extinguished and
automatically converted into the right to receive the following consideration
(collectively, the "Merger Consideration"):
(A) $100.00 in cash, without interest (the "Cash Consideration"), plus
(B) 1.1851 validly issued, fully paid and nonassessable shares of the common
stock of Lumentum, par value $0.001 per share ("Lumentum Common Stock") (such
ratio, the "Exchange Ratio").
Pursuant to the terms of the Merger Agreement, each Coherent restricted stock
unit award (a "Coherent RSU"), other than Director RSUs (as defined below),
outstanding immediately prior to the Effective Time will be automatically
converted into time-based restricted stock units denominated in shares of
Lumentum Common Stock entitling the holder to receive, upon settlement, a number
of shares Lumentum Common Stock equal to the number of shares of Coherent Common
Stock subject to the Coherent RSU multiplied by the sum of (A) the Exchange
Ratio, and (B) the quotient obtained by dividing the Cash Consideration by the
volume weighted average price of a share of Lumentum Common Stock for a 10
trading day period ending prior to the closing of the Mergers (the "Closing").
For Coherent RSUs subject to performance-based vesting conditions and metrics,
the number of shares of Lumentum Common Stock subject to the converted Coherent
RSUs will be determined after giving effect to the Coherent Board of Director's
determination of the number of Coherent RSUs earned, based on the greater of the
target or actual level of achievement of such goals or metrics immediately prior
to the Effective Time.
The converted Coherent RSUs generally will be subject to the same terms and
conditions that applied to the awards immediately prior to the Effective Time,
provided that any Coherent RSUs subject to performance-based vesting conditions
will be subject solely to time- and service-based vesting. Each Coherent RSU
that is outstanding as of the date of the Merger Agreement that is outstanding
as of immediately prior to the Effective Time will be entitled to the following
vesting acceleration benefits:
(A) for any holder of Coherent RSUs who is a participant under Coherent's Change
of Control and Leadership Change Severance Plan (the "CIC Plan"), the
acceleration benefits under the CIC Plan upon such participant's involuntary
termination of employment in accordance with the terms and conditions set forth
therein and
(B) for any holder who is not a participant in the CIC Plan, the following
vesting acceleration benefits upon his or her termination of employment by
Coherent, Lumentum or their respective subsidiaries without "cause" within the
period beginning immediately following the date of the Closing and ending on the
date that is 12 months following the date of the Closing (or, if earlier,
December 31, 2022) (the "Qualifying Termination"), (A) if such holder's
Qualifying Termination occurs during calendar year 2021, the sum of: (x) 100% of
the total number of converted Coherent RSUs that otherwise would have vested
during calendar year 2021 under the applicable vesting schedule in effect on the
Closing had such holder remained employed with Coherent, Lumentum or their
respective subsidiaries through the last applicable vesting date for such award
in calendar year 2021 (and reduced by the total number of converted Coherent
RSUs that vested in calendar year 2021 prior to such Qualifying Termination)
plus (y) 50% of the total number of converted Coherent RSUs that otherwise would
have vested during calendar year 2022 under the applicable vesting schedule in
effect on the Closing had such holder remained employed with Coherent, Lumentum
or their respective subsidiaries through the last applicable vesting date for
such award in calendar year 2022, or (B) if such holder's Qualifying Termination
occurs during calendar year 2022, 50% of the total number of converted Coherent
RSUs that otherwise would have vested during calendar year 2022 under the
applicable vesting schedule in effect on the Closing had such holder remained
employed with Coherent, Lumentum or their respective subsidiaries through the
last applicable vesting date for such award in calendar year 2022 (and reduced
by the total number of converted Coherent RSUs that vested in calendar year 2022
prior to such Qualifying Termination).
Each Coherent RSU granted to a non-employee member of Coherent's Board of
Directors ("Director RSUs") (whether or not vested) that is outstanding
immediately prior to the Effective Time will, automatically vest in full and be
cancelled and converted into the right to receive the Merger Consideration as if
such Director RSU had been settled in shares of Coherent Common Stock
immediately prior to the Effective Time.
The Boards of Directors of Lumentum and Coherent have unanimously approved the
Mergers and the Merger Agreement. The transaction is subject to customary
closing conditions, including the absence of certain legal impediments, the
expiration or termination of the required waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, antitrust
approvals in other applicable jurisdictions, including China and South Korea,
the effectiveness of a registration statement on Form S-4 registering the shares
of Lumentum Common Stock to be issued in connection with the First Merger, and
approval by the holders of a majority of the outstanding shares of Lumentum
Common Stock and Coherent Common Stock. The transaction is not subject to any
financing condition.
The Merger Agreement contains customary representations, warranties and
. . .
Item 2.02. Results of Operations and Financial Condition.
On January 19, 2021, Lumentum reported results for its second first quarter
ended December 26, 2020. A copy of the Lumentum's press release is furnished as
Exhibit 99.1 to this Current Report on Form 8-K. The information in this Item
2.02, including Exhibit 99.1, is intended to be furnished and shall not be
deemed "filed" for purposes of Section 18 of the Securities Exchange Act of
1934, as amended (the "Exchange Act") or otherwise subject to the liabilities of
that Section, nor shall it be deemed incorporated by reference into any filing
under the Securities Act of 1933, as amended, or the Exchange Act, except as
expressly set forth by specific reference in such filing.
Item 8.01. Other Events.
On January 19, 2021, Coherent issued a joint press release with Lumentum
announcing the execution of the Merger Agreement. A copy of the press release is
furnished as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated
by reference herein.
Cautionary Note Regarding Forward-Looking Statements
This communication contains "forward-looking statements" within the meaning of
the federal securities laws, including Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These forward-looking statements are based on Coherent's and Lumentum's
current expectations, estimates and projections about the expected date of
closing of the proposed transaction and the potential benefits thereof, its
business and industry, management's beliefs and certain assumptions made by
Coherent and Lumentum, all of which are subject to change. In this context,
forward-looking statements often address expected future business and financial
performance and financial condition, and often contain words such as "expect,"
"anticipate," "intend," "plan," "believe," "could," "seek," "see," "will,"
"may," "would," "might," "potentially," "estimate," "continue," "expect,"
"target," similar expressions or the negatives of these words or other
comparable terminology that convey uncertainty of future events or outcomes. All
forward-looking statements by their nature address matters that involve risks
and uncertainties, many of which are beyond our control, and are not guarantees
of future results, such as statements about the consummation of the proposed
transaction and the anticipated benefits thereof. These and other
forward-looking statements are not guarantees of future results and are subject
to risks, uncertainties and assumptions that could cause actual results to
differ materially from those expressed in any forward-looking statements.
Accordingly, there are or will be important factors that could cause actual
results to differ materially from those indicated in such statements and,
therefore, you should not place undue reliance on any such statements and
caution must be exercised in relying on forward-looking statements. Important
risk factors that may cause such a difference include, but are not limited to:
(i) the completion of the proposed transaction on anticipated terms and timing,
including obtaining stockholder and regulatory approvals, anticipated tax
treatment, unforeseen liabilities, future capital expenditures, revenues,
expenses, earnings, synergies, economic performance, indebtedness, financial
condition, losses, future prospects, business and management strategies for the
management, expansion and growth of Coherent's and Lumentum's businesses and
other conditions to the completion of the transaction; (ii) failure to realize
the anticipated benefits of the proposed transaction, including as a result of
delay in completing the transaction or integrating the businesses of Coherent
and Lumentum; (iii) the impact of the COVID-19 pandemic and related private and
public sector measures on Coherent's business and general economic conditions;
(iv) risks associated with the recovery of global and regional economies from
the negative effects of the COVID-19 pandemic and related private and public
sector measures; (v) Coherent's and Lumentum's ability to implement its business
strategy; (vi) pricing trends, including Coherent's and Lumentum's ability to
achieve economies of scale; (vii) potential litigation relating to the proposed
transaction that could be instituted against Coherent, Lumentum or their
respective directors; (viii) the risk that disruptions from the proposed
transaction will harm Coherent's or Lumentum's business, including current plans
and operations; (ix) the ability of Coherent or Lumentum to retain and hire key
personnel; (x) potential adverse reactions or changes to business relationships
resulting from the announcement or completion of the proposed transaction; (xi)
uncertainty as to the long-term value of Lumentum common stock; (xii)
legislative, regulatory and economic developments affecting Coherent's and
Lumentum's businesses; (xiii) general economic and market developments and
conditions; (xiv) the evolving legal, regulatory and tax regimes under which
Coherent and Lumentum operate; (xv) potential business uncertainty, including
changes to existing business relationships, during the pendency of the merger
that could affect Coherent's and/or Lumentum's financial performance; (xvi)
restrictions during the pendency of the proposed transaction that may impact
Coherent's or Lumentum's ability to pursue certain business opportunities or
strategic transactions; (xvii) unpredictability and severity of catastrophic
events, including, but not limited to, acts of terrorism or outbreak of war or
hostilities, as well as Coherent's and Lumentum's response to any of the
aforementioned factors; (xviii) geopolitical conditions, including trade and
national security policies and export controls and executive orders relating
thereto, and worldwide government economic policies, including trade relations
between the United States and China; (xix) Coherent's ability to provide a safe
working environment for members during the COVID-19 pandemic or any other public
health crises, including pandemics or epidemics; and (xx) failure to receive the
approval of the stockholders of Lumentum and/or Coherent. These risks, as well
as other risks associated with the proposed transaction, are more fully
discussed in the joint proxy statement/prospectus to be filed with the SEC in
connection with the proposed transaction. While the list of factors presented
here is, and the list of factors presented in the joint proxy
statement/prospectus will be, considered representative, no such list should be
considered to be a complete statement of all potential risks and uncertainties.
Unlisted factors may present significant additional obstacles to the realization
of forward-looking statements. Consequences of material differences in results
as compared with those anticipated in the forward-looking statements could
include, among other things, business disruption, operational problems,
financial loss, legal liability to third parties and similar risks, any of which
could have a material adverse effect on Coherent's or Lumentum's consolidated
financial condition, results of operations, or liquidity. Neither Coherent nor
Lumentum assumes any obligation to publicly provide revisions or updates to any
forward-looking statements, whether as a result of new information, future
developments or otherwise, should circumstances change, except as otherwise
required by securities and other applicable laws.
Additional Information and Where to Find It
This communication is being made in respect of a proposed business combination
involving Lumentum and Coherent. In connection with the proposed transaction,
Lumentum will file with the Securities and Exchange Commission (the "SEC") a
Registration Statement on Form S-4 that includes the joint proxy statement of
Lumentum and Coherent that will also constitute a prospectus of Lumentum. The
information in the preliminary proxy statement/prospectus is not complete and
may be changed. When the joint proxy statement/prospectus is finalized, it will
be sent to the respective stockholders of Coherent and Lumentum seeking their
approval of their respective transaction-related proposals.
Lumentum may not sell the common stock referenced in the proxy
statement/prospectus until the Registration Statement on Form S-4 filed with the
SEC becomes effective. The preliminary proxy statement/prospectus and this
communication are not offers to sell Lumentum securities, are not soliciting an
offer to buy Lumentum securities in any state where the offer and sale is not
permitted and are not a solicitation of any vote or approval.
LUMENTUM AND COHERENT URGE INVESTORS AND SECURITY HOLDERS TO READ THE
REGISTRATION STATEMENT ON FORM S-4, THE RELATED JOINT PROXY STATEMENT/PROSPECTUS
INCLUDED THEREIN AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors and security holders will be able to obtain these materials (when they
are available and filed) free of charge at the SEC's website, www.sec.gov.
Copies of documents filed with the SEC by Lumentum (when they become available)
may be obtained free of charge on Lumentum's website at www.lumentum.com or by
contacting Lumentum's Investor Relations Department at
investor.relations@lumentum.com. Copies of documents filed with the SEC by
Coherent (when they become available) may be obtained free of charge on
Coherent's website at https://investors.coherent.com/ by contacting Coherent's
Investor Relations at investor.relations@coherent.com.
Participants in the Merger Solicitation
Each of Lumentum, Coherent and directors, executive officers and certain other
members of management and employees may be deemed to be participants in the
solicitation of proxies in respect of the transaction. Information regarding
these persons who may, under the rules of the SEC, be considered participants in
the solicitation of the respective stockholders of Coherent and Lumentum in
connection with the proposed transaction is set forth in the proxy
statement/prospectus to be filed with the SEC. Additional information regarding
Lumentum's executive officers and directors is included in Lumentum's definitive
proxy statement, which was filed with the SEC on September 25, 2020. Additional
information regarding Coherent's executive officers and directors is included in
Coherent's definitive proxy statement, which was filed with the SEC on April 6,
2020. You can obtain free copies of these documents using the information in the
paragraph immediately above.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
2.1 Agreement and Plan of Merger, dated as of January 18, 2021, by and
among Lumentum Holdings Inc., Coherent, Inc., Cheetah Acquisition Sub,
Inc. and Cheetah Acquisition Sub LLC*
10.1 Commitment Letter, dated as of January 18, 2021, by and among Lumentum
Holdings Inc., Deutsche Bank Securities Inc. and Deutsche Bank AG New
York Branch.
99.1 Press Release entitled "Lumentum Provides Preliminary Fiscal Second
Quarter 2021 Financial Results", dated January 19, 2021
99.2 Joint Press Release of Lumentum Holdings Inc. and Coherent, Inc.,
dated January 19, 2021
104 Cover Page Interactive Data File (formatted as Inline XBRL)
* Certain of the exhibits and schedules to this exhibit have been omitted in
accordance with Regulation S-K Item 601(b)(2). The Registrant agrees to furnish
supplementally a copy of all omitted exhibits and schedules to the SEC upon its
request.
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