Coherent to sell aerospace and defense business to Advent for $400 mln

SAXONBURG, Pa. - Coherent Corp. (NYSE:COHR), whose stock has surged over 74% in the past year and is currently trading near its 52-week high of $118, announced Wednesday it has reached a definitive agreement to sell its Aerospace and Defense business to private equity firm Advent for $400 million, as part of the company’s strategic portfolio optimization. According to InvestingPro analysis, the stock appears to be trading above its Fair Value.

The transaction, expected to close in the third quarter of 2025, will allow Coherent to focus on its core growth markets while using proceeds to reduce debt, which the company said would be immediately accretive to earnings per share. The company’s current ratio of 2.47 indicates strong liquidity, with analysts expecting profitability this year despite recent challenges.

The business being sold designs and manufactures optical and laser systems for defense applications across 10 geographic sites with approximately 550 employees. Following the close, it will operate under a new name to be announced later. With annual revenue of $5.59 billion and robust revenue growth of 21.7% in the last twelve months, Coherent maintains a strong market position.

"As part of our strategic portfolio optimization process, this transaction furthers our strategy to concentrate efforts on core growth markets and products," said Jim Anderson, CEO of Coherent, in a press release statement.

Shonnel Malani, Managing Partner at Advent, indicated the firm plans to invest significantly in research and development to strengthen the business’s position in advanced laser and optical solutions. Advent, which manages over $94 billion in assets, has previously invested in the national security sector through companies including Cobham, Ultra Electronics, and Maxar Technologies.

Coherent, founded in 1971, provides photonics technology primarily to datacenter, communications, and industrial markets. The company operates in more than 20 countries.

The transaction remains subject to customary closing conditions. For investors seeking deeper insights into Coherent’s financial health and growth prospects, InvestingPro offers an extensive analysis with 15+ additional ProTips and a comprehensive Pro Research Report, helping you make more informed investment decisions.

In other recent news, Coherent Corp. announced a definitive agreement to sell its Aerospace and Defense business to Advent for $400 million. This transaction, expected to close in the third quarter of 2025, is part of Coherent’s strategic portfolio optimization and aims to reduce debt, which the company says will immediately enhance earnings per share. Coherent has also signed a multiyear strategic supply agreement with Apple to produce vertical-cavity surface-emitting lasers (VCSELs) for devices like iPhones and iPads. Benchmark has reiterated its Buy rating on Coherent, citing strong growth in the artificial intelligence and datacenter sectors, with significant capital expenditure expected in these areas. S&P Global Ratings has revised its outlook on Coherent to stable from negative, highlighting strong demand for the company’s datacom transceivers and a revenue increase of over 20% year-over-year as of the third quarter of fiscal year 2025. Additionally, Coherent introduced the Osprey femtosecond laser for medical applications, featuring high beam quality and power efficiency. These developments reflect Coherent’s ongoing efforts to focus on core growth markets and improve financial performance.

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