Coherent Corp. has completed the sale of its Aerospace & Defense business to Advent International, resulting in the launch of Attalon as an independent company focused on mission-critical optics and directed energy systems. This divestiture shifts Coherent’s strategic focus toward photonics infrastructure for data centers, communications and industrial applications, while generating approximately $X billion in proceeds and reducing its revenue base by roughly 12%. Management highlights that capital from the transaction will be redeployed to accelerate innovation in high-margin segments, deliver targeted share repurchases and strengthen the balance sheet with an anticipated leverage ratio below 2.0× within 12 months.

An analyst from Seeking Alpha has initiated coverage of Coherent Corp. with a Strong Buy rating, citing three structural tailwinds: surging AI data center demand, essential photonics infrastructure requirements and portfolio simplification post-divestiture. In the latest quarter, Coherent reported 17% year-over-year revenue growth to $1.58 billion, led by a 26% increase in the data center & communications segment. Operating leverage delivered a 200 basis-point gross margin expansion and 73% growth in EPS. These results outpace the peer-group median revenue growth of 8% by more than 12 percentage points, while Coherent’s forward PEG ratio of 1.04× trades 38% below the sector median, underscoring potential undervaluation and offering investors a favorable risk-reward profile.