Note 2.

Acquisitions

Aegis Lightwave, Inc.

In July 2011, the Company acquired all of the outstanding shares of Aegis Lightwave, Inc. (“Aegis”), a privately-held company based in Woburn, Massachusetts with additional locations in New Jersey and Australia, for approximately $46.1 million, net of cash acquired of $8.4 million. Aegis supplies tunable optical devices required for high speed optical networks that provide the bandwidth expansion necessary for increasing Internet traffic. As a result of the acquisition, the Company will enhance its product portfolio for the increasing deployments of 40G and 100G in flexible and reconfigurable optical networks, including those aimed at delivering fiber to the home over passive optical networks. Aegis will work cooperatively with the Company’s subsidiary, Photop Technologies, Inc. (“Photop”) to achieve synergies by leveraging and expanding combined optical communication product offerings around the world. The following table presents the allocation of the purchase price of the assets acquired and liabilities assumed at the date of acquisition ($000):


Assets
Short-term investment	$	565
Accounts receivable		4,572
Inventories		2,853
Prepaid and other current assets		256
Deferred income taxes		11,185
Property, plant and equipment		2,933
Intangible assets		19,047
Goodwill		16,193


Total assets acquired	$	57,604


Liabilities
Accounts payable	$	1,375
Deferred income taxes		7,176
Long-term debt		1,295
Other accrued liabilities		1,617


Total liabilities assumed	$	11,463


Net assets acquired	$	46,141

The goodwill of Aegis of approximately $16.2 million is included in the Near-Infrared Optics segment and is attributed to the expected synergies and the assembled workforce of Aegis. None of the goodwill is deductible for income tax purposes. The approximately $11.2 million of deferred tax assets of Aegis are primarily related to historical net operating losses and tax credit carryforwards. The Company has considered any carryforward limitations and expirations and expects to fully utilize these carryforwards to offset future income taxes.

The amount of revenues and earnings of Aegis included in the Company’s Condensed Consolidated Statement of Earnings for the year ended June 30, 2012 were revenues of $17.3 million and net losses of $2.2 million. In conjunction with the acquisition of Aegis, the Company incurred approximately $0.9 million of transaction costs, which were expensed in fiscal year 2011 in accordance with current accounting standards.

The following unaudited pro-forma consolidated results of operations for fiscal year 2012 and 2011, have been prepared as if the acquisition of Aegis had occurred July 1, 2010, the beginning of the Company’s fiscal year 2011, which is the fiscal year prior to acquisition ($000 except per share data).


	Year Ended June 30,
	2012		2011
Net revenues	$	534,630	$	533,295
Net earnings attributable to II-VI Incorporated	$	60,306	$	86,322
Basic earnings per share	$	0.96	$	1.39
Diluted earnings per share	$	0.94	$	1.36

The pro-forma results are not necessarily indicative of what actually would have occurred if the transaction had taken place at the beginning of the period, are not intended to be a projection of future results and do not reflect any cost savings that might be achieved from the combined operations.