Merger activity increased last week with five new deals announced and four deals completed. There were also eleven new SPAC business combinations announced last week and six new potential deals in the works.
The highlight for last week was the bidding war for Coherent (COHR). Coherent was founded with limited financial resources in the laundry room of one of its founding members in Palo Alto, CA. In the summer of 1966, next to a washer and dryer, and using a piece of rain gutter as a key component, Coherent’s founders began building their first laser. Four months later, Coherent unveiled the very first CO2 commercially available laser. The company that was significantly impacted by the COVD-19 pandemic is now in the middle of a bidding war. On January 19, Coherent agreed to be acquired by Lumentum for $5.7 billion. On February 8, MKS Instruments (MKSI) announced an unsolicited bid to acquire the company for $6 billion, a 16% premium over Lumentum’s bid and on February 12, II-VI Incorporated (IIVI) announced an unsolicited bid to acquire Coherent in a deal valued at $6.5 billion, a 10% premium to the MKS bid and a 24% premium to Lumentum’s bid.
On a personal note, it was also interesting to see the $12.50 per share cash offer by Electronic Arts (EA) for mobile gaming company Glu Mobile (GLUU). We have written about Glu Mobile several times in the past and in October 2012 mentioned that one of the catalysts for the company was a potential acquisition by Activision, Electronic Arts or Zynga. I didn’t realize then it may take more than 8 years for this to come to fruition. I first wrote about the company in early March 2010 here and here and the stock was trading under $1 and the Apple App Store ecosystem was young. The company had to transform its business model from making games for “feature phones” that were sold through carriers like Verizon to competing on a global scale through the App Store. After a lot of volatility in a business driven by hits, it is good to see this positive outcome for investors.
You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) that automatically updates itself during market hours.
There were six new deals announced in the Deals in the Works section last week.