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Signify announces its agreement with Eaton

Signify has recently entered into a definitive agreement with Eaton to acquire Cooper Lighting Solutions for USD 1.4 billion in cash.

“Today’s announcement confirms the strategic importance of the North American market for Signify. This acquisition will substantially strengthen our position in this attractive market,” said Eric Rondolat, CEO of Signify.

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Eric Rondolat, CEO, Signify

He also said, “We look forward to welcoming the team from Cooper Lighting. They have built a high-performance company based on professionalism, truly innovative offers and a long and strong relationship with their customers. We share a genuine passion and single focus for Lighting and a successful track record in innovation. We will join forces to further develop connected lighting and provide our customers with the highest level of service while optimizing operational efficiencies.”

A strategic transaction to strengthen Signify’s position in the North American professional lighting market

This acquisition is fully in line with Signify’s strategy to expand in attractive markets, enhancing Signify’s position in the North American market and improving the business mix.

Signify and Cooper Lighting will maintain separate front offices: sales forces, agent networks, product and brand portfolios, marketing and product development teams. Both businesses will be able to strengthen their respective product portfolios, benefitting from an increased power of innovation as well as more competitive and cost-efficient offerings.

Substantial cost synergy potential of more than USD 60 million per year

The transaction is expected to generate substantial cost synergies of more than USD 60 million per year, largely to be achieved in the first three years. These tangible and well-identified cost synergies will stem from savings in the bill of materials as well as from supply chain and sourcing optimization.

Compelling financial metrics

Signify will acquire Cooper Lighting Solutions for a cash consideration of USD 1.4 billion (approx. EUR 1,270 million) on a cash and debt-free basis. The enterprise value of the transaction net of the present value of tax benefits will be USD 1,313 million (approx. EUR 1,191 million), representing a multiple of 7.0x the expected 2018 EBITDA excluding synergies, and 5.3x including run-rate synergies.

Transaction impact on Signify

Upon closing of the acquisition, Signify will generate over 50% of its sales in the Professional segment, increasing the revenue base for its growing profit engines from EUR 4.9 billion to EUR 6.4 billion. The proportion of sales generated in the Americas increases from 28% to 40%.

Financing Structure

The acquisition is fully financed with debt, with committed bridge financing arranged. Signify intends to replace the bridge loan and the existing term loan debt obtained at IPO with a new financing structure before or shortly after the closing of this transaction.

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Nitisha Dubey

A diligent writer, who has been working from last five years in the same field. She has covered lots of event and expo for travel & judiciary, now covering technology. Book reading, exploring different destinations and varieties of cuisine are some hobbies. Love to watch biographies and historical movies.

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