Under the terms of the Agreement and Plan of Merger, each outstanding share of EMCORE common stock (other than excluded and dissenting shares) was converted into the right to receive $3.10 per share in cash, without interest. EMCORE described Velocity One as combining three aerospace and defense manufacturing businesses under one platform: EMCORE, Cartridge Actuated Devices, Inc. (a 50-year veteran designer and manufacturer of energetic devices), and Aerosphere Power, a manufacturer of power system solutions for commercial and military aerospace, military ground vehicles, and UAV applications. John Borduin, CEO of Velocity One, said: "We are excited to bring our playbook to EMCORE, as well as decades of experience operating aerospace and defense manufacturing and engineering businesses and optimizing their efficiency and profitability. EMCORE has excellent technology and offers a large product portfolio." Brandon White, Managing Director at Charlesbank, said the companies saw "a tremendous opportunity to bring together three leading aerospace manufacturing businesses to create a compelling new player in the market." EMCORE CEO Matt Vargas said the merger "underscores our commitment to our domestic and international customer base, including strengthening relationships with and generating synergies across a range of high-priority U.S. and NATO defense programs and industrial partners served by all three companies."
According to EMCORE's definitive merger proxy statement (DEFM14A), the $3.10 per share Merger Consideration represented a premium of 41.6% over EMCORE's $2.19 closing stock price on November 6, 2024 (the day before the Board approved the deal), 54.2% over the closing price one week prior, 26.5% over the closing price one month prior, 226.3% over the closing price three months prior, and 156.8% over the 90-calendar-day volume-weighted average price ending September 27, 2024. The deal followed a competitive process: Mobix Labs, Inc. had publicly disclosed a non-binding proposal to acquire EMCORE for $3.80 per share in cash, and earlier (August-September 2024) had submitted letters of intent indicating a $43.0 million aggregate purchase price (approximately $3.38 per share, subject to adjustment). The EMCORE Board, advised by Craig-Hallum Capital Group LLC, ultimately favored the Velocity One/Charlesbank transaction over the higher nominal Mobix bid, citing greater closing certainty because the Guarantor (Charlesbank) and Parent had entered into an equity commitment letter covering the full Aggregate Merger Consideration, whereas Mobix "did not provide sufficient evidence of its ability to finance" its proposal and sought to cap its own breach damages at a $1.5 million reverse termination fee. The Board also noted that Parent had represented the $3.10 price was the maximum it was willing to pay, following arm's-length negotiations.
Craig-Hallum rendered a fairness opinion to the EMCORE Board (dated November 7, 2024) that the Merger Consideration was fair, from a financial point of view, to the unaffiliated shareholders. In its comparable public company analysis, benchmarked against AmpliTech Group, KVH Industries, One Stop Systems, Peraso, and Pixelworks, Craig-Hallum derived implied enterprise value reference ranges of $8.0 million to $105.6 million (0.1x-1.2x CY2024E revenue), $8.7 million to $79.9 million (0.1x-0.9x CY2025E revenue), and $7.0 million to $16.6 million (1.4x-3.4x CY2025E adjusted EBITDA), translating to implied per-share value ranges of roughly $0.99-$9.46, $1.07-$7.30, and $0.90-$1.85, respectively. Its discounted cash flow analysis implied enterprise values of $20.5 million to $36.8 million (terminal revenue method, $2.43-$3.97 per share) and $13.9 million to $25.2 million (terminal EBITDA method, $1.78-$3.00 per share). The proxy does not disclose a single specific implied multiple for the actual $3.10 transaction price itself, nor a total aggregate equity or enterprise value for the deal.
The transaction was financed through an equity commitment from Charlesbank Equity Fund X, Limited Partnership (the "Guarantor"), which committed to invest or cause to be invested in the equity capital of Parent an aggregate cash amount of up to $37.0 million, solely for the purpose of funding the Merger and other transactions contemplated by the Merger Agreement, including the Merger Consideration, pursuant to an equity commitment letter dated November 7, 2024. No separate debt financing for the acquirer is described in the materials reviewed.
The Merger Agreement provided for termination fees: EMCORE would owe Parent a $1.5 million termination fee under specified circumstances (including a change in the Board's recommendation or breach of non-solicitation covenants), while Parent would owe EMCORE a $2.0 million termination fee under specified circumstances (including Parent's breach or failure to close), subject to an aggregate maximum cap referenced in the agreement.
On the legal advisory side, Pillsbury Winthrop Shaw Pittman LLP served as legal counsel to EMCORE, and Foley & Lardner LLP served as legal counsel to Velocity One/Parent. On the financial advisory side, Craig-Hallum Capital Group LLC acted as exclusive financial advisor to EMCORE and rendered the fairness opinion, while Skyway Capital Markets, LLC and Launch Point Partners LLC acted as buy-side financial advisors to Velocity One. Alliance Advisors, LLC served as EMCORE's proxy solicitor for the special meeting.
EMCORE shareholders approved the Merger Agreement proposal at a virtual special meeting held February 27, 2025, as reported in a Form 8-K filed that same day disclosing the vote results. The Merger closed the next day, February 28, 2025: Merger Sub merged with and into EMCORE, with EMCORE continuing as the surviving corporation and becoming an indirect wholly owned subsidiary of Velocity One Holdings, LP. Outstanding EMCORE restricted stock units and performance-vesting awards were cancelled and converted into lump-sum cash payments based on the $3.10 Merger Consideration (performance awards vesting at 100% of target); there were no outstanding stock options at closing. EMCORE's common stock was suspended from trading and delisted from Nasdaq, and the company's certificate of incorporation and bylaws were amended and restated in connection with the closing. Directors Matthew Vargas, Cletus C. Glasener, Bruce E. Grooms, Jeffrey J. Roncka, and David Rodgers departed the Board as a result of the Merger's completion, not due to any disagreement with the company.