Advent International Acquires Coherent's Defense Business in $400 Million Deal

What's Happening?

Advent International, a private equity firm, has agreed to purchase Coherent Corp.'s defense and aerospace business for approximately $400 million. Coherent, known for its expertise in photonics, is selling this unit as part of its strategy to concentrate on core growth markets such as data centers, communications, and industrial sectors. The defense business, which designs and manufactures optical and laser systems for defense applications, employs 550 people across 10 sites. Advent plans to continue investing in the unit's research and development efforts, and the management team will remain in place post-acquisition. The business will be rebranded, although the new name has not yet been announced.

Why It's Important?

This acquisition highlights Advent International's commitment to investing in national security technologies, which are considered mission-critical. By acquiring Coherent's defense business, Advent is expanding its portfolio in the defense sector, complementing previous acquisitions such as Cobham, Ultra Electronics, and Maxar Technologies. The deal underscores the growing importance of optical and laser technologies in defense applications, which are crucial for modern military operations. The transaction could lead to advancements in defense technology, benefiting national security and potentially influencing defense policy and industry standards.

What's Next?

Following the acquisition, Advent International is expected to focus on enhancing the research and development capabilities of the newly acquired defense business. The rebranding of the business will be a significant step, potentially affecting its market positioning and customer relationships. Industry stakeholders, including defense contractors and government agencies, may closely monitor the integration process and the strategic direction Advent will take. The acquisition could also prompt other private equity firms to explore similar opportunities in the defense sector.