Lumentum Holdings Inc. (NasdaqGS:LITE) signed a definitive agreement to acquire Oclaro, Inc. (NasdaqGS:OCLR) for $1.8 billion on March 11, 2018. Pursuant to the terms of the agreement, Lumentum will acquire all of the outstanding common stock of Oclaro for $5.6 in cash (Cash Consideration) and 0.0636 times the share of Lumentum common stock (Exchange Ratio). Additionally, each Oclaro restricted stock unit award that does not become vested at the closing will be converted into a Lumentum restricted stock unit award at “Equity Award Exchange Ratio” that means the sum of (i) the Exchange Ratio, plus (ii) the quotient obtained by dividing (A) the Cash Consideration by (B) the Lumentum Holdings average closing price. Each Oclaro stock option will be converted into a Lumentum stock option at “Equity Award Exchange Ratio”. Each Oclaro restricted stock award that becomes vested as of immediately prior to the closing will be converted into the right to receive the consideration in respect of each Oclaro share underlying such award. Each Oclaro stock appreciation right will be cancelled and converted into the right to receive cash. Oclaro stockholders are expected to own approximately 16% of the combined company at closing. Lumentum plans to finance the merger with approximately $413.6 million of cash from the combined company balance sheets, approximately $647.5 million in Lumentum common stock, and approximately $550 million in new debt. In connection with merger Lumentum entered into a commitment letter with Deutsche Bank Securities Inc. and Deutsche Bank AG New York, New York Branch, pursuant to which, the banks have committed to provide a senior secured term loan facility in an aggregate principal amount of up to $550 million. In case of termination, Oclaro may be required to pay Lumentum a termination fee of $63 million and Lumentum may be required to pay Oclaro a termination fee of $80 million.

One member of Oclaro's Board of Directors will join Lumentum's Board of Directors upon the closing of the transaction. The transaction is subject to customary closing conditions, including the absence of certain legal impediments, the expiration or termination of the required waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the effectiveness of a registration statement on Form S-4 registering the shares of Lumentum common stock to be issued in merger, approval by the holders of a majority of the outstanding shares of Oclaro common stock, receipt of regulatory approval in China and the Nasdaq listing approval of the Lumentum common stock to be issued in the merger. The transaction is not subject to any financing condition. The transaction has been unanimously approved by the Board of Directors of both the company. As of April 4, 2018, the U.S. Federal Trade Commission granted early termination of the waiting period. As of April 5, 2018, the U.S. antitrust approval was obtained. M&A committee was formed to review and authorize transactions including the Octaro transaction. The committee comprised of Dougherty, Kendall Cowan and Ian Small. As of May 16, 2018, the S-4 was filed. The transaction has been approved by the shareholders of Oclaro on July 10, 2018. As of December 6, 2018, antitrust clearance from the People's Republic of China's State Administration for Market Regulation was obtained. The transaction is expected to close in the second half of calendar 2018. The transaction is expected to close on or around December 10, 2018. The deal is expected to be accretive to non-GAAP earnings per share immediately after closing.

Deutsche Bank Securities acted as the financial advisor whereas Robert T. Ishii, Derek Liu, Lisa Stimmell, John Mao, Michael Occhiolini, Nathan Cao, Gordon Grafft, Alex Imas, Albert Parisi-Esteves, Michael Rosati, Peter Wu, Manja Sachet, John McGaraghan, Khurram Awan, Nayha Zubair, Jamillia Ferris, Christopher Williams, Brendan Coffman, Brandon Gantus, David Thomas, Austin Holt, JeAnne Reyes, Briza Sanchez, Eileen Marshall, Timothy Shapiro, Anne Seymour, Lawrence Perrone, Lee Cumberland, Martin Sul, James McCann, Jennifer Sayles Okorn, Ben Hance, Brianna Dougherty and Dana Hall of Wilson Sonsini Goodrich & Rosati acted as legal advisors to Lumentum. Judy Hamel acted as general counsel to Lumentum. Phil Berkowitz and Jason Greenberg of Jefferies LLC acted as financial advisors and Daniel R. Mitz and Kevin B. Espinola of Jones Day acted as legal advisors to Oclaro. David Teichmann acted as Oclaro's general counsel and Stanley Okawachi acted as associate general counsel. Jack Bodner, David Schwartzbaum, John Mei and Josh Nulman of Covington & Burling LLP acted as legal advisors to Jefferies LLC, financial advisor to debtor. Computershare Trust Company, NA acted as transfer agent whereas MacKenzie Partners, Inc. acted as proxy solicitor to Oclaro and will be paid a fee of approximately $0.0175 million. Oclaro agreed to pay Jefferies a fee of approximately $30.1 million of which $1 million was payable upon delivery of the fairness opinion.

Lumentum Holdings Inc. (NasdaqGS:LITE) completed the acquisition of Oclaro, Inc. (NasdaqGS:OCLR) on December 10, 2018. As a result of the completion of the acquisition, trading in Oclaro common stock on the NASDAQ Stock Market will cease as of December 10, 2018. Ian Small, a member of Oclaro's Board of Directors, has joined the Lumentum Board of Director. Oclaro employees will join Lumentum. Lumentum anticipates achieving an estimated $60 million in synergies in the 12-24 months following the closing of the transaction.