Finisar Corporation (NASDAQ: FNSR) is flying early on in the trading session this mornign, and for good reason. The supplier to Apple (AAPL) will be acquired in a deal that comes with a very strong premium. Today, we’ll talk about:
- The acquisition;
- what we’re seeing from FNSR stock as a result; and
- what we’ll be watching for ahead.
IIVI To Acquire FNSR
As mentioned above, Finsar is having a strong start to the trading session this morning after the company announced that it would be acquired. In a press release issued early this morning, it was announced that II-VI Incorporated and FNSR have entered into a definitive merger agreement.
According to the agreement, IIVI will acquire FNSR in a cash and stock transaction that comes with a total value of about $3.2 billion. The amount will be paid out via $15.60 per share in cash and 0.2218 shares of IIVI stock, or approximately $10.40 per share in stock, bringing the total value of FNSR under the agreement to $26.00 per share. That figure represents a premium of 37.7% over the stock’s most recent closing price.
While the transaction has been unanimously approved by the Boards of Directors at both companies, it is still subject to customary closing conditions as well as regulatory approval.
In a statement, Michael Hurlston, CEO at FNSR, had the following to offer:
The combination of our state-of-the-art technology platforms, deep customer relationships, great assets and amazing talent will enhance our ability to hit market windows that won’t stay open for long… This combination will accelerate our collective growth and will take advantage of the technology, products and manufacturing expertise that Finisar has uniquely developed over the course of its 30 year history.
We are extremely excited to combine Finisar with II-VI and together create a leader in photonics and compound semiconductors across all of the markets we serve. We are confident that the growth potential for the combined company is substantial, and we believe that our respective shareholders will be able to enjoy significant potential for value creation when the transaction is completed.
What We’re Seeing From The Stock
There are few stories that have the potential to lead to excitement quite like acquisition news. In the case of Finsar, the acquisition is great news for investors. After all, with such a strong premium, investors will enjoy an immediate return of value. So, it comes as no surprise to see that excited investors are pushing the stock on a run for the top. As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (7:43), FNSR is trading at $23.15 per share after a gain of $4.27 per share or 22.62% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on FNSR. In particular, we’re interested in following the story surrounding the acquisition. As mentioned above, approval from the Boards of the companies has already been taken care of, but with closing conditions and regulatory approval still needed for the close of the transaction, there’s a bit to pay attention to here. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!