Cree is getting out of the lighting business
Cree has signed an agreement to sell its lighting products business unit (Cree Lighting).
The company is selling the division, which includes the LED lighting fixtures, lamps and corporate lighting solutions business for commercial, industrial and consumer applications, to Ideal Industries for approximately $310 million. Cree expects to receive an initial cash payment of $225 million, subject to purchase price adjustments, and has the potential to receive a targeted earn-out payment of approximately $85 million based on an adjusted EBITDA metric for Cree Lighting over a 12-month period beginning two years after the transaction closes.
The agreement continues Cree’s previously announced strategy to create a more focused emiconductor company, providing growth capital for Wolfspeed, its core power and RF business, and equips Cree with additional resources to expand its semiconductor operations. The deal also enables Cree Lighting to gain additional global focus, channel support and investment as it becomes a growth engine for Ideal.
Ideal is a fourth-generation, family-owned, growing global company, serving as a market leader in electric power control and management. Cree Lighting’s portfolio and SmartCast technology are complementary to Ideal’s advanced control business and channel of suppliers, distributors, agents, and customer relationships, the companies said.
“Our combined technology and expertise will continue to build on Cree Lighting’s history of leadership and fits with the advanced systems Ideal has pioneered over the past 103 years,” said Jim James, chairman and CEO of Ideal. “Together, we will create a powerful combination of innovation, channel strength and operational excellence.”
The closing of the transaction is anticipated to occur in the fourth quarter of fiscal 2019.
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