Coherence, Inc is up 30% pre-market today. As a result of the news that Lumentum Operations LLC is buying the company. Both companies are optical fiber manufacturers. Lumentum agreed to pay $5.7 Billion in cash. Or $100 for 1.18 shares of Coherence, Inc.
Coherence, Inc makes laser components, sensors, and optics for commercial, industrial, scientific, and research purposes. Their main focus is on OLED. Or organic light-emitting diode. Which the company says will get more and more adoption from smartphone makers. And TV manufacturers also. Fiber optics will also play a crucial role in tomorrow’s future. With the growing popularity of cloud computing for gaming. Faster internet with low latency is needed. The greatest risk to this stock poses Starlink. Elon Musk’s side project. The company ditched fiber optics and uses satellites in low earth orbit. To prove fast internet to the world without any latency. But as the company is still in “beta” version, there is no immediate threat.
“Today’s announcement is an important advancement of Lumentum’s strategy,” said Alan Lowe, Lumentum President, and CEO. “In our five years as a standalone public company, we have focused on developing the most innovative products and technology in our industry and partnering with market-leading customers to help them compete and win in their markets. As we look ahead, we are thrilled to join forces with Coherent to create one of the world’s largest and most diverse photonics technology companies with leading positions in the growing market for photonics.
Coherence, Inc is valued at $3.7 Billion and Lumentum is valued at $8 Billion. Adding today’s pre-market gains and the company is valued at around $5 billion.That means that there is more upside potential.
The companies have announced strong preliminary financial results and will host their conference calls today at 5:30 A.M PT/ 8:30 A.M. ET.