Rofin-Sinar Technologies (RSTI) to Be Acquired by Rival Coherent Inc. for $942 Million

Shares of Rofin-Sinar Technologies Inc. (RSTI) were trading up +7.85 or +34.26 percent to $30.76 per share in Thursday’s premarket after news broke late yesterday that the company would be taken over by Coherent Inc. (COHR) for $32.50 per share. Rofin-Sinar shares closed at $22.91, off -0.03 or -0.13 percent in Wednesday’s regular trading session.

Plymouth, Michigan based Rofin-Sinar Technologies Inc. was originally founded in Hamburg, Germany in 1975 as SINAR Laser Systeme Verkaufsgesellschaft mbH.
After taking over UK based Rofin, the company became Rofin-Sinar Laser GmbH. The company was taken over by Siemens AG in 1987 and was spun off and went public in 1996 under the symbol RSTI. The company is a market leader in the manufacture and sale of lasers, including solid state, q-switch and diode, as well as fiber and CO2 lasers. The company markets its products under the ROFIN, NELC, PRC, DILAS and Nufern brands.

Spun off from Spectra-Physics and converted to public ownership in 1970, Santa Clara, California based Coherent, Inc. is a major manufacturer and marketer of laser systems, optics laser measurement and control components and laser accessories. The company manufactures and sells CO2 lasers for cutting metal, as well as components for flat panel display screen manufacturing, integrated circuit packaging and inspection, materials processing and scientific research.

The announcement of the deal happened yesterday after the market close and caused a halt in afterhours trading in Rofin-Sinar shares. The $32.50 per share transaction price is a +42 premium to Rofin-Sinar’s closing price earlier on Wednesday.

The deal is intended to be funded by Coherent through a combination of cash on hand and fully committed debt financing by Barclays. The transaction is scheduled to close in the next six to nine months subject to regulatory approvals in the U.S. and abroad, Rofin-Sinar shareholders and other customary closing conditions.

Rofin-Sinar President and Chief Executive Officer Thomas Merk said in the joint press release that, “Coherent and ROFIN are highly complementary both technologically and geographically. Together, we will significantly increase the value we can bring to our customers by creating a better-positioned, highly diversified company with a greater breadth of product offerings and innovation and a comprehensive technology portfolio. Our two companies share similar cultures and we are excited for our customers and employees to benefit from the greater resources and growth prospects that come from being part of a larger organization.”

The deal is expected to be accretive to earnings per share in the first full fiscal year following the close of the transaction. Coherent expects to realize about $30 million in annualized run rate synergies within 18 to 24 months of the transaction’s close. The synergies will be achieved through increased efficiency, optimizing the combined R&D folder and leveraging the scale of the two company’s businesses.

Coherent is being advised by Barclays and Wilson, Sonsini, Goodrich & Rosati PC are acting as legal advisors. Rofin-Sinar has Greenhill & Co. acting as financial advisors with Norton Rose Fullbright US LLP as its legal advisor.

Other News on RSTI

ROFIN Postpones 2016 Annual Meeting To Coincide With Special Meeting Relating To Proposed Transaction With Coherent

Company will announce the date of the combined annual and special meeting upon mailing of their proxy statement.

Vote For Change: SilverArrow Urges All Stockholders To Vote For All SilverArrow Nominees On The Green Proxy Card

Coherent’s takeover bid coincided with a major proxy battle at Rofin-Sinar.

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Published on Mar 17, 2016
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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