GO Scale Capital, an investment fund sponsored by GSR Ventures and Oak Investment Partners, is to acquire an 80.1% interest in Philips' combined LED components and Automotive lighting business, Limiteds.
Philips will retaining the remaining 19.9% interest. The transaction values the business at an enterprise value of approximately USD3.3 billion. The transaction is expected to be completed in the third quarter of 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 will remain an important customer of Lumileds and will continue the existing innovation and supply partnership. The transaction includes the transfer of a broad patent portfolio of more than 600 patent families related to LED manufacturing and automotive lighting from Philips to Lumileds.
Sonny Wu, co-founder and managing director of GSR Ventures and chairman of GO Scale Capital, who will serve as interim Chairman of Lumileds following the completion of the transaction, says: “The Lumileds acquisition will be a perfect example of how GO Scale turns cutting edge technologies into world class companies. 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. Through Lumileds' world-leading technology in key verticals such as LED chips, LED mobile flash and automotive lighting, together with a customer base including the likes of BMW, Volkswagen and Audi, we expect to see significant growth and unparalleled inroads into new opportunities such as electric vehicles."
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. The GO Scale Capital team has deep technology expertise and a track record in scaling up disruptive technologies in China. Current investments include Boston Power, a leading manufacturer of electric vehicle batteries and Xin Da Yang, a fast growing Eco-EV company in China. The team brings deep knowledge of the technology and new energy sectors. Through their past investments in the LED industry, they have access to complementary technologies and manufacturing capacity. This uniquely complements Lumileds' high-power LED manufacturing footprint and expertise, and the combination offers opportunities for the company to pursue further growth and scale through the GO Scale model.
"Philips is very positive about this transaction with GO Scale Capital as its principals are long-term, growth-oriented investors with a track record of building and expanding technology companies," says Frans van Houten, CEO of Royal Philips. "We have significantly improved the performance of the LED components business and optimised the industrial footprint in the Automotive lighting business over the last few years, and established a strong management team and innovation pipeline. We are therefore convinced that together with GO Scale Capital, Lumileds can grow faster, attract more customers and increase scale as a stand-alone company."
"I am convinced that together with the new investors led by GO Scale Capital, Lumileds will extend its leading product portfolio of lighting components and continue to achieve robust growth," says Pierre-Yves Lesaicherre, CEO of Lumileds. "With our strong technology leadership, we are ready to address the future needs of our customers. We will work closely with our industry partners and customers to lead innovation and the transformation of our industry."