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primarysourced Photonics sector Coherent
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~5 min read · 1,223 words ·updated 2026-04-29

Finisar acquisition (Sep 24, 2019)

The Finisar acquisition is the load-bearing photonics deal in Coherent Corp.’s history. The 2022 Coherent Inc. acquisition is larger by enterprise value and gave the combined entity its name — but the photonics franchise that today supplies NVIDIA’s optics partnership (the InP EML platform, the VCSEL fab in Sherman TX, the datacom and telecom transceivers, the optical-amplifier and ROADM modules) almost entirely traces to assets brought into the company by the September 24, 2019 Finisar close.

Deal structure

FieldValue
AcquirerII-VI Incorporated (now Coherent Corp.)
TargetFinisar Corporation (NASDAQ: FNSR)
AnnouncedNov 9, 2018
ClosedSep 24, 2019
Equity value~$3.2 billion
Per-share consideration$26.00 ($15.60 cash + 0.2218 II-VI shares, valued ~$10.40 at $46.88 IIVI close on Nov 8, 2018)
Premium37.7% to Finisar’s Nov 8, 2018 close
FundingCash on hand of combined balance sheets + ~$2B of new funded debt (Amended and Restated Credit Agreement with Bank of America, N.A. signed at close)
Board impactThree former Finisar directors joined the II-VI board (board expanded to 11 directors at close)
AntitrustAll approvals secured by Sep 20, 2019 (China being the gating jurisdiction); close consummated Sep 24, 2019

Sources: II-VI press releases 2018-11-09 and 2019-09-24; SEC merger agreement filing (EDGAR Finisar CIK 1094739, accession 0001104659-18-067123 / 0001104659-18-067124).

What Finisar brought (the asset stack)

Finisar Corporation, founded in 1988 in Sunnyvale, California, was an optical-component leader at the moment of the deal — a top-three datacom-transceiver merchant, a top-tier telecom-component supplier, and the operator of the largest dedicated VCSEL fab in the United States. The acquisition consolidated several distinct franchises into II-VI.

Indium phosphide (InP) wafer manufacturing — Sherman, Texas

The single most strategically important asset. Finisar operated InP wafer fabrication and laser-die manufacturing at scale — the substrate platform for electro-absorption-modulated lasers (EMLs), distributed-feedback lasers (DFBs), and the building blocks of high-bandwidth pluggable transceivers. Coherent today is one of two merchant InP EML suppliers globally, in duopoly with Lumentum. That duopoly position originated with the Finisar fab.

VCSEL manufacturing — Sherman, Texas (the Apple deal)

On December 13, 2017 — almost a year before the II-VI/Finisar agreement — Apple awarded Finisar $390 million from its Advanced Manufacturing Fund to convert a 700,000 sq ft long-shuttered Sherman, Texas plant into a high-volume VCSEL fab. VCSELs power Face ID, Animoji, and Portrait-mode selfies on iPhone X and successors, plus AirPods proximity sensing.

Apple disclosed at the December 2017 announcement that Q4 2017 alone purchased 10× more VCSEL wafers from Finisar than the entire prior worldwide volume. The award created 500+ engineering / technician / maintenance jobs at the Sherman site. Apple’s role was financial commitment + capacity guarantee — it remained Finisar’s customer (and in 2021, Apple announced additional follow-on investment in the same Sherman facility, by then operating under II-VI ownership).

This is the second-source VCSEL position for Apple Face ID (Lumentum being the first source). The Apple-Finisar relationship transferred to II-VI at closing and persisted into the rebranded Coherent Corp.

Datacom transceivers

Finisar was a top-three merchant supplier of pluggable optical transceivers across QSFP, QSFP28, and the CFP/CFP2 form factors — used in hyperscale data centers, enterprise switching, and routing. This is the platform that today, integrated into Coherent’s “Communications” segment, supplies NVIDIA’s optical interconnect ecosystem and competes directly with Innolight, Eoptolink, and the merchant peer set.

Telecom transport components

Finisar’s WSS (wavelength selective switch), ROADM (reconfigurable optical add-drop multiplexer), and tunable-laser portfolio served global long-haul and metro carrier networks. This consolidated with II-VI’s existing telecom-component business in fiber amplifiers and pump lasers.

3D-sensing optics

Beyond the VCSEL emitter itself, Finisar shipped beam-shaping optics and sub-assemblies for 3D-sensing modules — a vertically integrated 3D-sensing optical-module capability that was directly relevant to consumer-electronics customers including Apple.

Strategic rationale (II-VI’s articulated thesis)

The November 9, 2018 announcement framed the combination around four vectors:

  1. Compound semiconductors at scale. II-VI’s 1971 founding franchise was compound-semiconductor materials (CdTe, ZnSe, ZnS, GaAs, SiC). Finisar’s InP wafer manufacturing extended that platform into the most commercially relevant compound-semiconductor system for high-speed photonics.
  2. Photonics platform expansion. Finisar brought transceivers (the productized end of photonics), filling the one missing layer in II-VI’s stack between materials/components and end-market revenue.
  3. R&D scale. Combined R&D footprint targeted a substantially expanded addressable market in 5G fronthaul/backhaul, hyperscale data centers, 3D sensing, and consumer optics.
  4. Vertical integration economics. II-VI’s compound-semi materials feeding Finisar’s component manufacturing feeding Finisar’s transceivers — a stack that competing pure-play transceiver vendors (Innolight, Eoptolink) could not match without external suppliers.

Integration and the Mattera framing

Per the November 2018 announcement, Dr. Vincent (“Chuck”) Mattera Jr. (II-VI President & CEO) continued in role at the combined company. Three Finisar directors joined the II-VI board at closing. The deal closed in less than 11 months from announcement — a reasonable cadence for a $3.2B cross-border-relevant photonics deal needing China antitrust clearance.

II-VI’s debt load expanded materially at the close — ~$2B of new funded debt under the Amended and Restated Credit Agreement with Bank of America, N.A. layered on top of the existing capital structure. This levered balance sheet is part of what drove the 2021 Coherent Inc. financing structure to lean on Bain Capital convertible-preferred equity rather than additional bank debt. (See coherent inc acquisition.)

Why this deal matters for the photonics thesis

Reading 2026 Coherent Corp. accurately requires recognizing that the Finisar 2019 acquisition — not the 2022 Coherent Inc. deal that gave the company its name — defines the photonics-research-relevant franchise:

  • The InP EML capacity that places Coherent in the Lumentum duopoly originated at the Sherman fab Finisar built.
  • The VCSEL second-source for Apple Face ID is a Finisar legacy.
  • The datacom transceiver business competing with Innolight / Eoptolink is Finisar.
  • The WSS / ROADM telecom franchise is Finisar.
  • The 2026 NVIDIA $2B common-stock investment is structured around production capacity at the Sherman, Texas site — the same site Apple paid to retool in 2017 and that Finisar brought into the company in 2019.

If you mentally substitute “Finisar 2019” for “Coherent’s photonics franchise” you’ll be correct on every modern question about Coherent Communications-segment revenue.

Cross-references

Sources