Lumentum Holdings Inc. is in advanced negotiations to buy laser maker Coherent Inc., according to people familiar with the matter, in a deal that would combine two companies whose products are used in everything from laser eye surgery to semiconductor manufacturing.
A cash deal and action could happen as early as this week, as long as the talks don’t fall apart, people said. The exact terms could not be learned, but Coherent had a market value of $ 3.7 billion at the close of Friday, while Lumentum’s was $ 8 billion.
Coherent, based in Santa Clara, California, manufactures lasers and related products used in medical and scientific equipment, industrial applications and semiconductor manufacturing. It was founded in 1966.
Lumentum, based in Milpitas, California, mainly manufactures optical components used in cloud networks, data transmission and subsea communications. It also has a segment of lasers with offers used in the manufacture of plates and circuit boards. It became a self-employed company in 2015, when it was separated from JDS Uniphase Corp.
Lumentum’s shares were up about 40% last year, while Coherent’s were down about 10% in the same period, compared to the 17% increase in the S&P 500.