Business News | Dec 01, 2010

WalesOnline.co.uk Announced £5.1m Deal from Enfis to Take over PhotonStar

SWANSEA-based lighting technology company Enfis has announced plans to acquire LED firm PhotonStar in a £5.1m deal. The company intends to finance the deal with a placing of 5m new shares and is looking to raise a further £2m with the placing of a further 19.79m shares. These placings will need to be approved by a meeting of shareholders on December 23.

While Enfis’ LED technology is used in demanding sectors such as film and television production, medical lighting and ultra-violet curing applications, PhotonStar specialises in residential and commercial lighting.

Following the acquisition the enlarged company would be readmitted to AIM.

Explaining the rationale behind the deal Enfis’ board said: "The Directors have examined a number of corporate opportunities over the last nine months and believe that PhotonStar presents an exciting prospect for existing Shareholders.

"The Directors believe that PhotonStar's LED, lighting fixture and light engine business is growing strongly. Following the Acquisition, the Enlarged Group will be re-admitted to AIM. The increased size of the Enlarged Group will provide the PhotonStar business with a higher profile and will give the Enlarged Group greater access to capital, to facilitate further organic and potential acquisitive growth."

PhotonStar was founded in 2007 by James McKenzie and Majd Zoorob. The company has been focussed on increasing the efficiency of LED lighting and reducing its cost. It has 11 patent applications for its technology.

The firm is based in Romsey near Southampton. Its most recent results show that in the six months to September 30 the company had a turnover of £1.456m and made an operating loss of £85,000.

The lighting market is currently in transition, with older technologies being replaced by new forms of lighting such as LED. It is estimated that by 2015 LED lamps and models will account for 50% of all lighting.

While there are some big players entering the market, such as Phillips and Osram, Enfis believes that there is room for many smaller players to operate successfully.

Under the proposed acquisition the founders of PhotonStar will join the board of Enfis – between them the two men will hold just over 31% of the enlarged company’s shares. Dr James McKenzie will become the company’s new chief executive officer, while Enfis’ current CEO will become chief financial officer of the enlarged company.

The Enfis board said that following the completion of the deal the initial focus would be to integrate the PhotonStar businesses within the enlarged group.

Beyond that the board said it would be seeking to pursue both organic growth and potentially, acquisitions. It said that such acquisitions could include established lighting fixture manufacturers transitioning their businesses to LED lighting and key suppliers offering capacity expansion.

Reference: WalesOnline

Details on the aquisition can be found at an announcement of the London Stock Exchange

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