Coherent enters into agreement to acquire Rofin-Sinar

Coherent will acquire Rofin for $32.50 per share in cash, in a transaction valued at approximately $942 million.

On March 16, 2016, lasers and laser-based technology developer and manufacturer Coherent (Santa Clara, CA) and Rofin-Sinar Technologies (Plymouth, MI, and Hamburg, Germany), a developer and manufacturer of high-performance industrial laser sources and laser-based solutions and components, announced that their Boards of Directors have unanimously approved a definitive agreement under which Coherent will acquire Rofin for $32.50 per share in cash, in a transaction valued at approximately $942 million.

Pending a release of merger details, this transaction appears to make good sense—created will be a $1.3 billion company positioned to challenge laser industry leaders TRUMPF and IPG Photonics that will have a full and complete product portfolio to serve interests in the manufacturing world.

Rofin develops and manufactures lasers for laser-based industrial material processing applications. The company possesses a broad portfolio of innovative technologies and its product offerings include solid-state lasers, fiber lasers, and diode lasers, as well as an extensive range of pulsed laser products and CO2 lasers, delivering solutions to a global customer base.

"The combination of Coherent and Rofin represents a unique opportunity to strengthen Coherent's position in materials processing," says John Ambroseo, Coherent's president and CEO. "The addition of Rofin's complementary portfolio will build on Coherent's capabilities as a world leader in laser and photonics-based technology and solutions, and create meaningful value for our stockholders."

"It (the merger) grows out of the successful technological and strategic transformation that Rofin has been undergoing under the leadership of the Board and management team, and the hard work of Rofin's many talented professionals to execute our strategic plan," says Peter Wirth, chairman of Rofin's Board of Directors.

The transaction is expected to be accretive to earnings per share in the first full year following the close. Coherent expects to realize approximately $30 million in annualized run rate synergies within 18 to 24 months post-closing, achieved through increased efficiencies, leveraging the scale of the combined businesses and optimizing the combined R&D portfolio. Additional synergies are expected through accelerated growth from combining the best capabilities from both companies with a presence in over 60 global markets.

Coherent intends to finance the transaction through a combination of cash on hand and fully committed debt financing from Barclays.

The transaction is expected to close within six to nine months, subject to approval by Rofin stockholders, regulatory approvals in the US and other countries as well as other customary closing conditions.

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