Lumentum plans $1.1 billion convertible notes offering

SAN JOSE, Calif. - Lumentum Holdings Inc. (NASDAQ:LITE), a technology company with a market capitalization of $9.27 billion and currently trading near its 52-week high of $137.10, announced Tuesday its intention to offer $1.1 billion in convertible senior notes due 2032 in a private placement to qualified institutional buyers under Rule 144A of the Securities Act.

The optical and photonic products manufacturer, which has generated revenue of $1.65 billion in the last twelve months, said it would also grant initial purchasers a 13-day option to buy up to an additional $165 million in notes. The notes will be senior, unsecured obligations with interest payable semi-annually, according to the company’s statement.

Lumentum plans to use part of the proceeds to fund capped call transactions designed to reduce potential dilution to common stock upon conversion of the notes. The company also intends to repurchase a portion of its existing 0.50% Convertible Senior Notes due 2026.

The remaining proceeds will go toward general corporate purposes, including potential debt repayment, capital expenditures, working capital and possible acquisitions, though the company stated it currently has no definitive agreements for any pending material acquisitions.

The convertible notes will be offered exclusively to qualified institutional buyers and have not been registered under the Securities Act, meaning they cannot be sold in the United States without registration or an applicable exemption from registration requirements.

The notes will be convertible at the option of holders into cash up to the aggregate principal amount, with any remainder payable in cash, shares of Lumentum common stock, or a combination, at the company’s election. The interest rate, conversion rate and other terms will be determined upon pricing of the offering.

Lumentum designs and manufactures optical components and subsystems used in telecom, enterprise, and data center networks, as well as lasers for advanced manufacturing and various applications.

This announcement is based on a press release statement from the company.

In other recent news, Lumentum Holdings Inc. reported strong financial results for the fourth quarter of fiscal year 2025. The company exceeded analysts’ expectations with an earnings per share of $0.88, compared to the forecasted $0.80, and reported revenue of $480.7 million, surpassing the expected $467.31 million. Stifel raised its price target for Lumentum to $132, highlighting strong demand for datacom components and record levels of electro-absorption modulated laser shipments. Wolfe Research also increased its price target to $150, citing structural drivers like the rise of artificial intelligence that are boosting optical traffic growth. Raymond James set a new price target of $145, noting the positive impact of Optical Circuit Switches and a faster-than-expected revenue ramp. BofA Securities upgraded Lumentum’s stock rating from Underperform to Neutral, pointing to the company’s revenue growth trajectory. These developments reflect a positive sentiment among analysts regarding Lumentum’s recent performance and future potential.

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