By Anthony Capkun
March 31, 2015 – Royal Philips says a consortium led by GO Scale Capital will acquire an 80.1% interest in Philips’ $3.3-billion US combined LED components and Automotive Lighting business, with Philips retaining the remaining 19.9% interest (including a 34% interest in the Lumileds US operations).
“We have significantly improved the performance of the LED components business and optimized the industrial footprint in the Automotive Lighting business over the last few years, and established a strong management team and innovation pipeline,” said Frans van Houten, CEO of Royal Philips (photo). “We are therefore convinced that together with GO Scale Capital, Lumileds can grow further, attract more customers and increase scale as a stand-alone company.”
The transaction is expected to be completed in Q3 2015, subject to closing conditions, including customary regulatory approvals. Following the transaction, the new company will continue under the name Lumileds, led by CEO Pierre-Yves Lesaicherre. Philips’ Lighting Solutions business will remain a customer of Lumileds and will “continue the existing innovation and supply partnership”.
GO Scale Capital is a new investment fund sponsored by GSR Ventures and Oak Investment Partners. The consortium partners are Asia Pacific Resource Development, Nanchang Industrial Group and GSR Capital.
“GO Scale Capital will focus on expanding Lumileds’ opportunities by investing in its global centres of operation and in the fast-growing general lighting and automotive industries,” said Sonny Wu, chair of GO Scale Capital, who will serve as interim chair of Lumileds following the completion of the transaction.
Following the separation of Lumileds, Philips Lighting will focus on the lighting solutions markets. As we announced in September 2014, Independence Day for Philips Lighting business, Philips has started the process of creating two companies focused on HealthTech and Lighting Solutions opportunities. As part of that strategic repositioning, Philips will transition the Lighting Solutions business into a separate legal structure, with the intention (currently) of effectuating the separation through an initial public offering, “although other options will continue to be reviewed”.