Less than a year after moving into Sherman, Finisar Corp. is being acquired by a global manufacturer of engineered materials and optoelectronic components in a deal worth about $3.2 billion.

II-VI Incorporated and Finisar announced the acquisition in a recent joint-released press release. In a teleconference call held following the announcement, Finisar CEO Michael Hurlston said he believes the combined company would have substantial growth potential.

“By joining II-VI, I’m confident that we’ll be able to accelerate our growth in ways that neither of our teams could achieve as independent companies,” Hurlston said. “Further, we believe this transaction represents a compelling value composition for Finisar shareholders as it delivers immediate cash value while providing the opportunity to participate in the significant upside potential of our combined organizations once the transaction is completed.”

The definitive merger agreement, which has been approved by the boards of both companies, states II-VI will acquire Finisar in a cash and stock transaction that will see Finisar’s stockholders receiving, on a pro-rated basis, $15.60 per share in cash and 0.2218 shares of II-VI common stock.

II-IV President and CEO Vincent D. Mattera Jr. said the merger will create a formidable photonics and compound semiconductor company.

“We believe that combining with Finisar will enable us to be even more effective as we accelerate the development of our portfolio of products in the emerging markets of 5G, 3D sensing, cloud computing, electric and autonomous vehicles and advanced microelectronics manufacturing,” Mattera said. “Together we will be capable of serving the broad set of fast-growing markets of communications, consumer electronics, military, industrial processing lasers, automotive semiconductor equipment and life sciences.”

Finisar announced late last year that it would hire 500 new employees to expand its production of vertical-cavity surface-emitting lasers at its new Sherman facility this year to help meet Apple’s demand for the technology in its iPhone line of products. VCSELs are small semiconductor devices that emit light vertically and measure the depth at which that light is reflected. That depth-sensing technology helps power Apple product features such as facial recognition, portrait mode selfies and proximity-sensing capabilities.

II-VI develops innovative products industrial, optical communications, military, life sciences, semiconductor equipment and consumer market applications, and has a headquarters in Saxonburg, Pennsylvania.

“This merger should create substantial growth potential for the combined company,” Sherman Economic Development Corp. Executive Vice President Stacey Jones said via email. “With room to grow at our Finisar Sherman facility, this seems to be a great opportunity for Sherman.”

When Mattera was asked about his expectations of the evolution of the 3D sensing market after the transaction during the teleconference call, he said the combined company’s focus is on getting the manufacturing platform in place to be able to offer the marketplace differentiated products made on those platforms.

“Thinking about the product portfolio and the next generation of lasers and optics that will be required for the marketplace is where we’re going to spend more of our time as we get the manufacturing technology platforms in place,” Mattera said. “I think we’ve done a real good job of that in the United States, in our Warren, New Jersey facility and — as far as I can tell since I had an opportunity to visit the Sherman and Allen plants just in the last few weeks or so — I’m excited to see the efforts that are going on in Sherman and the hard work that the team are doing in Allen as well.”

The II-VI president and CEO also said the company plans to utilize its existing operations to the best of their capabilities. Once the transaction closes, Finisar and II-VI will have over 24,000 employees in 70 locations worldwide.

Finisar Director of Corporate Communications Victoria McDonald said, in a prepared statement issued via email, the company expects the transaction to close in the middle of 2019, subject to approval by each company’s shareholders, antitrust regulatory approvals and other customary closing conditions.

“Finisar is excited about our joint announcement to combine with II-VI,” McDonald said. “We have no other updates to provide at this time.”

Hurlston said II-VI has been a supplier to Finisar for quite some time, but declined to comment when asked about VCSEL production in Sherman.

“Unfortunately, we’re in our quiet period, so I don’t want to talk about our numbers and anything directionally with our business,” Hurlston said.
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