II-VI Completes Acquisition Of Photop Technologies

(Comment on this article at http://www.financialwire.net/2010/01/06/ii-vi-completes-acquisition-of-photop-technologies/)

January 6, 2010 (FinancialWire) -- II-VI Inc. (NASDAQ: IIVI) has completed its previously announced acquisition of Photop Technologies, Inc. (Photop).

The initial consideration consisted of cash of $45.6 million and 1,146,000 shares of II-VI common stock. In addition, the purchase agreement provides up to $12.0 million of additional cash earn-out opportunities based upon Photop achieving certain agreed upon financial targets in calendar 2010 and 2011. The final purchase price will be subject to customary closing adjustments, including working capital adjustments.

Photop, headquartered in Fuzhou, China with over 3,000 employees, is a vertically-integrated manufacturer of engineered materials, optical components, microchip lasers for visible display applications and optical modules for use in fiber optic communication networks and other diverse consumer and commercial applications. Photop generated approximately $43 million in revenues for the nine months ended September 30, 2009.

The acquisition is expected to be neutral to net earnings during the fiscal year ending June 30, 2010. The positive operational results of Photop for the six months ending June 30, 2010 are expected to offset (a) the various acquisition related expenses which are required to be expensed as incurred under Accounting Standards Codification Topic 805: Business Combinations (FAS 141R) and (b) the dilutive effect of the shares of II-VI common stock that were used for the acquisition. The transaction is expected to be accretive in the fiscal year ending June 30, 2011.

During the quarter ended December 31, 2009, II-VI incurred approximately $1.0 million of transaction-related expenses, after-tax. For the fiscal year ending June 30, 2010, II-VI is updating its revenue guidance from a range of $264 million to $274 million to a range of $293 million to $305 million as a result of the Photop transaction. II-VI is maintaining its guidance for earnings per share from continuing operations to range from $0.85 to $0.95. II-VI plans to release its financial results for the second fiscal quarter ended December 31, 2009 on January 19, 2010, and will update its fiscal year ending June 30, 2010 guidance as appropriate.

Bob Dodds, president of Hong Kong-based DRP Capital, served as financial advisor to II-VI Inc..

Photop will be combined with II-VI's VLOC Inc. subsidiary and Near-Infrared Optics business for financial reporting purposes. This combined group, along with the Compound Semiconductor Group, will be directed by Dr. Vincent D. (Chuck) Mattera, Jr., vice president of II-VI, who was promoted TODAY to executive vice president of II-VI.

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