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One of the biggest and most surprising announcements in the lighting industry this year was the news of Signify’s intent to acquire Cooper Lighting Solutions from Eaton for $1.4 billion to reinforce its position in the North American lighting market. Here are the top five things you need to know about what this transaction means for Signify and what to expect following the expected close of the deal in Q1 2020:
1. Positioning for North American Growth
This acquisition is fully in line with Signify’s strategy to expand in attractive markets, and most importantly, reinforcing Signify’s position in the North American market. As the largest lighting market in the world, the professional lighting segment in North America is expected to grow to $12 billion annually.
2. Two Strong Businesses = One Powerhouse
Cooper Lighting Solutions brings with it a well-developed agent network, an impressive reputation for innovation and strong brand names with considerable equity. So, while this well-respected industry player will become a key part of Signify as a company, we believe it is critical for Cooper Lighting Solutions to continue to operate independently maintaining its own numerous product brand names. This approach will preserve the strategy and principles behind the commercial success of both companies.
3. Financially Attractive Transaction
Together, we are poised to thrive even further. When finalized, the debt-financed deal will improve our business mix, with professional revenues increasing from 42% to 53% of total Signify sales. By combining forces, we have more opportunities to bring ground-breaking connected lighting to more customers. Add in substantial cost synergies from well-identified savings in the bill of materials, supply chain and insourcing, and we will unveil a combined company that can garner $60 million in savings.
4. Shared DNA
From overlapping, complementary markets and wide-ranging, innovative, award-winning product portfolios to multi-million-dollar cost synergies and strong, well-respected brands, we share a similar DNA. Displaying strong commitments to innovation and R&D investments are just the foundation to position us for growth in 2020 and beyond.
5. Increased Innovation
Combined, our innovation capabilities will continue to reinforce our position in the Americas across the board, but especially in connected lighting. More competitive offerings will enable more opportunities to bring ground-breaking connecting lighting to a wider array of existing and prospective customers.
To learn more about the acquisition of Cooper Lighting Solutions, click here.
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