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Finisar, the producer of laser scanners used to power Apple's Face ID system on its iPhones, has been acquired by optical system producer II-VI Incorporated, in a purchase said to be worth approximately $3.2 billion.
II-VI announced the purchase on Friday, with the acquisition consisting of a cash-and-stock deal at a 37.7 percent premium on Finisar's closing price from Thursday. Shareholders of Finisar will own around 31 percent of the combined company once it is completed, which is currently expected to close in mid-2019 following regulatory approval.
It is anticipated the purchase will generate approximately $2.5 billion in annual revenue and $150 million in cost savings within three years of the deal's close, the Financial Times reports.
Finisar is known to be a supplier to Apple for the VCSELs (vertical-cavity surface-emitting lasers) used in the TrueDepth camera in the iPhone X, iPhone XS, iPhone XS Max, and iPhone XR. The lasers are used to produce a depth map of the user's face, primarily for Face ID but also for other features like Portrait selfies and Animoji.
Apple provided $390 million to Finisar out of its billion-dollar Advanced Manufacturing Fund toward the end of 2017, to increase its production and R&D spending on the components. Finisar also acquired a 700,000 square foot facility in Sherman, Texas, which is directly linked to Apple's VCSEL demands.
II-VI is an optoelectronic component and optical systems producer, so there are considerable synergies between the two firms. In a statement, II-VI claimed the purchase will "unite two innovative, industry leaders with complementary capabilities and cultures to form a formidable industry-leading photonics and compound semiconductor company."
The acquisition may also help II-VI in other fields that use VCSELs, including self-driving vehicles, allowing cars to see the road and any nearby obstacles via a depth map. This is also a field Apple is involved with via "Project Titan," with the iPhone producer operating a fleet of autonomous vehicles in California to test out its self-driving systems.