Business News | Dec 13, 2016

Philips Sells 80.1% Shares of Lumileds to Apollo Global Management

Royal Philips announced that it has signed an agreement to sell an 80.1% interest in Lumileds, a leading supplier of LED components and automotive lighting, to certain funds managed by affiliates of Apollo Global Management, LLC (NYSE: APO) (together with its consolidated subsidiaries: “Apollo”). Philips will retain the remaining 19.9% interest* in Lumileds.

The transaction values Lumileds at an enterprise value of approximately USD 2 billion, including debt and debt-like items. Philips expects to receive cash proceeds, before tax and transaction-related costs, of approximately USD 1.5 billion and participating preferred equity**. The transaction is expected to be completed in the first half of 2017, subject to customary closing conditions, including the relevant regulatory approvals.

What does that mean for Philips:

In fact, Philips loses approx. USD 1.3 billion compared to the USD 3.3./2.8 billion offer from Beijing-based GO Scale in January due to the decision of US Committee on Foreign Investment (CFIUS) that had raised unspecified issues over the deal — the committee itself typically doesn’t disclose its decisions.

Comments from Philips and  Apollo Global Management:

“With this transaction, we will be completing an important phase of the transformation of our portfolio and I am satisfied that in the Apollo managed funds we have found the right owner for Lumileds,“ said Frans van Houten, CEO of Royal Philips. “In line with our strategic focus on health technology, Lumileds has been operating as a standalone company within Philips since early 2015. With Apollo managed funds acquiring a majority interest in Lumileds and partnering with Philips, Lumileds is now well-positioned for further growth and value creation, building on its robust innovation pipeline, technology leadership and strong customer base.”

“We are extremely excited about the opportunity for our managed funds to acquire Lumileds,” said Robert Seminara, Senior Partner at Apollo. “We look forward to partnering with Philips and the outstanding management team and employee base at Lumileds, and bringing in Apollo’s resources to support the continued growth and innovation of this industry-leading business.”

“I am convinced that together with the Apollo managed funds, Lumileds will sharpen its focus and accelerate innovation in its leading product portfolio of lighting components,” said Pierre-Yves Lesaicherre, CEO of Lumileds. “With our strong R&D programs and intellectual property, we are ready to address the current and future needs of our customers. Lumileds will work closely with its industry partners and customers and capture growth opportunities in an exciting industry.”

About Apollo Global Management:

Apollo is a leading global alternative investment manager with assets under management of approximately USD 189 billion*** in private equity, credit and real estate funds, invested across a core group of nine industries, where Apollo has considerable knowledge and resources. Apollo managed funds have a long and successful track record of acquiring and growing businesses in partnership models of co-ownership with former parent companies.

About Lumileds:

Lumileds is a leading supplier of lighting components to the general illumination, automotive and consumer electronics markets with operations in more than 30 countries and has approximately 9,000 employees worldwide. In 2015, Lumileds generated sales of approximately USD 2 billion.

* As part of the agreement, Philips will retain its 19.9% interest in Lumileds for a minimum period of three years following completion of the transaction, subject to customary drag-along and tag-along conditions or an IPO.
** Upon completion of the transaction, Philips will receive participating preferred equity through which Philips will be entitled to an incremental share of the future value creation, depending on the achievement of certain returns by Apollo managed funds.
*** As of September 30, 2016.

About Royal Philips:

Royal Philips (NYSE: PHG, AEX: PHIA) is a leading health technology company focused on improving people's health and enabling better outcomes across the health continuum from healthy living and prevention, to diagnosis, treatment and home care. Philips leverages advanced technology and deep clinical and consumer insights to deliver integrated solutions. Headquartered in the Netherlands, the company is a leader in diagnostic imaging, image-guided therapy, patient monitoring and health informatics, as well as in consumer health and home care. Philips' health technology portfolio generated 2015 sales of EUR 16.8 billion and employs approximately 70,000 employees with sales and services in more than 100 countries. News about Philips can be found at www.philips.com/newscenter

FEATURED

Nichia Showcases LEDs with 'Light so Good'

Nichia Showcases LEDs with 'Light so Good' At Light + Building 2020 held in Frankfurt, Nichia – the leader in high-performance LED solutions – reveals it will present at least three complementary technologies to improve the delivery of light quality under an over-arching banner of 'Light so Good'. Read more »

EDITORIAL

Zhaga Summit – September 23rd in Bregenz

Zhaga Summit – September 23rd in Bregenz Luger Research and Zhaga are proud to announce that the 2020 LpS/TiL conference will host a Zhaga Summit. This one-day event will provide application-driven introductions to the latest Zhaga standards, review their market reception, and solicit inputs from the specifier community through workshops. Read more »

EDITORIAL

Research Confirms that Light Pollution Can Suppress Melatonin Production in Humans and Animals

Research Confirms that Light Pollution Can Suppress Melatonin Production in Humans and Animals Melatonin sets the internal clock. Researchers from IGB in an international team have analyzed data on the impact of light pollution on melatonin formation in humans and vertebrates. They found that even the low light intensities of urban skyglow can suppress melatonin production. Melatonin ... Read more »

EDITORIAL

CIE Announces Availability of New Documentation: Test Method for OLED Luminaires and OLED Light Sources

CIE Announces Availability of New Documentation: Test Method for OLED Luminaires and OLED Light Sources The new CIE International Standard S 025-SP1/E:2019 is a supplement to CIE S 025:2015 Test Method for LED Lamps, LED Luminaires and LED Modules specifies the requirements for measurement of electrical, photometric, and colorimetric quantities of OLED luminaires and OLED light sources. These sources ... Read more »

EDITORIAL

Care, Caution & Awareness Are Needed When Using LED Lights

Care, Caution & Awareness Are Needed When Using LED Lights Kyra Xavia is a researcher, educator and investigative journalist based in New Zealand. Her roles as general secretary of the Light and Lighting Research Consortium (LLRC), delegate for the International Dark Sky Association (IDA), New Zealand Ambassador for Women in Lighting 2019, and co-leader of ... Read more »