Acquiring Company: Velocity One Holdings, LP (Private Equity-backed firm)
Target Company: EMCORE Corporation (NASDAQ: EMKR)
Merger Structure: EMCORE will become an indirect wholly owned subsidiary of Velocity One Holdings.
Offer Price: $3.10 per share in cash (a premium over recent trading prices)
Total Deal Value: Estimated at $37 million (funded by Charlesbank Equity Fund X)
Expected Closure: Q1 2025, subject to shareholder approval
Shareholder Vote Date: February 27, 2025
This all-cash deal means EMCORE shareholders will no longer own stock in the company post-merger, instead receiving a lump sum payout.
*UPDATE - Vote approved. EMKR shares to be delisted after the close of extended hours trading on Friday, February 28th
Why Is EMCORE Merging with Velocity One Holdings?
The merger comes amid shifting market dynamics and EMCORE’s ongoing efforts to stabilize its financial position. Here are some of the likely reasons behind the decision:
Financial Stability & Immediate Shareholder Value
EMCORE has experienced stock price volatility over the past year, and this deal provides shareholders with a guaranteed payout of $3.10 per share—potentially higher than recent market prices.
For investors concerned about long-term stock performance, the deal offers immediate liquidity instead of waiting for potential market rebounds.
Strategic Expansion Under Velocity One Holdings
Velocity One Holdings, backed by private equity firm Charlesbank Capital Partners, aims to expand its footprint in the high-tech manufacturing space.
By acquiring EMCORE, Velocity One Holdings secures advanced optical and navigation technology, potentially integrating it into broader aerospace and defense markets.
Market Consolidation & Competitive Edge
The merger eliminates a publicly traded competitor, consolidating market power under a larger, private entity.
This could position the new ownership to increase research funding, streamline operations, and pursue strategic partnerships without the constraints of public market pressures.
What Happens to EMCORE Shareholders?
For current EMCORE investors, the merger means:
$3.10 per share payout – If the deal is approved, each share will convert to cash.
End of public trading – EMCORE will delist from NASDAQ and become privately owned.
Stock options & RSUs converted to cash – Employees and executives with restricted stock units (RSUs) or stock options will receive cash equivalents based on the merger price.
No future EMCORE stock growth potential – Investors lose the ability to hold shares for long-term gains.
What If I Don’t Vote or Approve the Merger?
Even if individual shareholders vote against the deal, the merger could still proceed if a majority approves it. If passed, all investors will receive the $3.10 per share payout, whether they voted or not.
How Is the Merger Being Funded?
A key part of the merger’s success is funding from Charlesbank Equity Fund X, which has committed $37 million to finance the transaction.
Additionally, Charlesbank has issued a limited guarantee, ensuring financial backing for the deal and covering potential termination fees if the merger does not proceed.
This strong financial commitment reduces risks for shareholders and increases confidence in the transaction’s completion.
Shareholder Vote: Key Dates & How to Participate
Special Meeting Date: February 27, 2025, at 11:00 AM EST
Meeting Format: Virtual-only via webcast at www.proxydocs.com/EMKR
Voting Deadline: Submit proxy votes before February 27, 2025
Required Approval: Majority of votes cast at the meeting
How to Vote:
Online: Visit www.proxydocs.com/EMKR and follow instructions.
Phone: Call the number listed on your proxy card.
Mail: Sign and return the proxy card in the prepaid envelope.
Important: If shareholders do not vote, their shares will not be counted toward the final approval decision.
Market Reaction & What Analysts Are Saying
Investor Sentiment & Stock Price Impact
Since the merger announcement on November 7, 2024, EMCORE’s stock price has stabilized closer to the $3.10 offer price. This suggests investors believe the deal is likely to be approved.
Some investors may feel undervalued by the deal if they expected long-term growth, while others appreciate the cash-out opportunity at a premium price.
Will Regulatory Approvals Delay the Merger?
Currently, no major antitrust issues are expected to arise. The merger is primarily financial and operational, without concerns of monopoly creation.
If all goes smoothly, the transaction should close in Q1 2025.
Final Thoughts: Should You Support the Merger?
The EMCORE-Velocity One Holdings merger presents a pivotal moment for shareholders. Here’s a breakdown of pros and cons:
Pros:
Guaranteed cash payout of $3.10 per share
No more exposure to market volatility
Potential growth under new ownership
Cons:
Loss of potential long-term upside
No future voting rights or dividends
End of EMCORE as a publicly traded company
Final Verdict
For investors seeking immediate returns, this deal is a strong exit opportunity. However, long-term holders who believe in EMCORE’s independent growth may find the acquisition disappointing.
Ultimately, the February 27 vote will decide the future of EMCORE.
FAQs About the EMCORE-Velocity One Holdings Merger
What happens if I don’t vote on the merger?
Your shares will not count toward the total vote. However, if the majority approves, you will still receive $3.10 per share in cash.
Is there a chance this deal could fall through?
The merger is well-funded and backed by Charlesbank Equity Fund X, making failure unlikely unless shareholders vote against it.
Will EMCORE still trade on NASDAQ after the merger?
No. EMCORE will become a private company, and its stock will no longer be publicly traded.
How will the merger affect EMCORE employees?
Employees holding restricted stock units (RSUs) or stock options will receive cash payouts based on the merger price. However, employment decisions will depend on Velocity One Holdings’ strategy post-merger.
EMKR EMCORE Acquisition
EMKR EMCORE Acquisition