Coherent Corp. · NYSE:COHR
Coherent — II-VI — Merger or Acquisition (March 2021)
14 slides from Coherent's merger presentation, Mar 16, 2021
Slide 1: Bain Capital Investment Thesis
Bain Capital Investment Thesis March 2021 Exhibit 99.2
Slide 2: Forward-looking Statements
Forward-looking Statements This communication contains forward-looking statements relating to future events and expectations that are based on certain assumptions and contingencies. The forward-looking statements are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigati
Slide 3: No Offer or Solicitation
No Offer or Solicitation This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration or qualification unde
Slide 4: Bain Capital Investment Thesis
Bain Capital Investment Thesis (1) Reflects proforma combined LTM EBITDA and includes $250 million of cost synergies Pillars of Bain Capital’s Investment Thesis Bain Capital will invest up to $2B in preferred equity to support the II-VI/COHR merger - Average conversion price is a 30% premium to curr
Slide 5: Proven Management Team
Proven Management Team Strong record of organic growth and successful acquisitions Source (Revenue): 2021E is the average of CapitalIQ analyst estimates as of March 15, 2021 Source (TSR): Annualized TSR for II-VI reflects 10-Day VWAP as of February 11, 2021 vs September 1, 2016 and annualized S&P TS
Slide 6: Growing Market
Growing Market Foresee continued, strong market growth driven by exposure to multiple megatrends Source: Bain Capital Analysis Industry Growth Rapidly Penetrating Sectors Communications Healthcare and Life Sciences Manufacturing Aerospace and Defense Consumer Electronics Fiber optic communication an
Slide 7: Key exposures
Key exposures Secular Growth Drivers Position Communications (Datacom, Telecom) Increasing data needs, mobile traffic growth #1 or #2 in several product lines Industrial Lasers and Components Precision manufacturing, Industrial MFG capex #1 in components Material Processing Materials capex Strong pr
Slide 8: Leading Platform
Leading Platform Source: IIVI 10-K filed on August 26, 2020 Global Footprint Manufacturing scale and cost leadership Footprint built for purpose Innovation Leader ~2,450 patents and ~4,050 RD&E + S&M personnel Strong co-development program with customers Virtuous cycle in technology leadership: Stro
Slide 9: R&D Strength
R&D Strength History of substantial investment in R&D, which will drive future growth Source: Company 10-K/Q filings and presentations LTM 12/31/2020 R&D Investment Point 3 Combined company on a PF basis will be the leader in R&D investment Historically, II-VI has demonstrated a strong ability to ge
Slide 10: Confidence in Synergies
Confidence in Synergies Source: Company filings, announcements and presentations Announced at signing Finisar Synergies Evolution (Incremental FY22 EBITDA) Announced Sept ‘20 Coherent Synergies Expectation (Incremental EBITDA 36 Months Post Close) Supply chain management Infeed – internal supply of
Slide 11: Greater Diversification and Scale
Greater Diversification and Scale Source: public filings, Bain Capital analysis Public Peer FY20 Revenue Comparison Why scale and diversity matter: More stable profitability Multiple growth levers Higher R&D investments Manufacturing efficiency Better market intelligence Deeper customer relationship
Slide 12: Diversification and Scale
Diversification and Scale Scale Revenue (CY20) $4.1B $2.3B $1.7B $1.2B Adj. EBITDA (CY20)2 $1.1B(1) $640M $625M $335M TEV (as of 3/15/21) $15B(3) $9B $7B $10B Exposures End sectors Sources: Revenue and EBITDA taken from latest 10K/Q for period ending 12/31/2020 End sectors taken from MKS Investor Pr
Slide 13: Potential for Re-rating of Trading Multiple
P/E Multiple 18-23x 21-26x 26-32x 28-33x 30-34x Revenue CY20 $11.3B $4.3B $5.5B $6.2B $3.1B $4.1B Adj. EBITDA CY20(1) (margin) $2.6B (23%) $1.3B (30%) $1.6B (28%) $1.4B (22%) $0.7B (22%) $1.1B(2) (27%) 2Y Fwd Revenue CAGR 10% 10% 8% 8% 6% 11%(4) R&D % of rev 8% 17% 7% 6% 6%(3) 11% Potential for Re-r
Slide 14: Bain Capital Investment Details
* Reflects proforma combined LTM EBITDA and includes $250 million of cost synergies Bain Capital Investment Details Up to $2.0B equity financing from Bain Capital in the form of preferred stock $750M initial investment committed for funding at signing ð 5% dividend, $85.00 conversion price $750M com