Face ID component maker acquired by II-VI for $3.2M

Optical products maker II-VI Inc. has reached a deal to acquire Finisar Corp., which makes vertical-cavity surface-emitting (VCSEL) laser components for Apple’s Face ID, for $26.00 per share in cash and shares of II-VI common stock, or $3.2 billion.

In addition to the components used for facial recognition, the combined company will market products for optical communications, such as hyperscale datacenter and 5G optical infrastructure, and RF (radio frequency) devices such as autonomous cars, according to the announcement.

The companies expect run-rate cost synergies from the deal to reach $150 million within 36 months of its close, while increasing the scale, broadening the technological base, providing complementary products and increasing leadership positions in growing markets for the combined business. Non-GAAP earnings per share are expected to rise by approximately 10 percent in the first year, and more than twice as much in future years.

The Dallas Morning News reports that Apple invested $390 million in Finisar’s laser optic technology in 2017, while II-VI has been expanding its VCSEL offerings, and acquired UK wafer fabrication facility Kaiam Laser Ltd. last year.

“Disruptive megatrends driven by innovative uses of lasers and other engineered materials present huge growth opportunities for both of our companies,” said Dr. Vincent D. Mattera, Jr., President and CEO, II-VI Incorporated. “In communications, materials processing, consumer electronics and automotive, we expect that the combination with Finisar will allow us to leverage our combined technology and intellectual property in InP, GaAs, SiC, GaN, SiP and diamond to achieve faster time to market, cost and scale. Together, we believe that we will be better strategically positioned to play a strong leadership role in the emerging markets of 5G, 3D sensing, cloud computing, electric and autonomous vehicles, and advanced microelectronics manufacturing.”

The transaction is expected to close in mid-2019, after the customer conditions are satisfied.

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