October 17, 2019
- Signify to acquire Cooper Lighting Solutions from Eaton for USD 1.4 billion in cash
- Clear strategic fit:
* Strengthening Signify’s market positions in North America, with increased innovation power and more competitive offerings;
* Improving the business mix with Professional revenues increasing from 42% to 53% of total sales1
- Respective agent networks and front office functions will continue to operate independently
- Substantial value creation opportunity: cost synergy potential with savings of more than USD 60 million per year, to be largely achieved in the first three years
- Compelling financial metrics: mid-teens EPS accretion in year 1; transaction ROIC to exceed WACC after year 1
- Transaction fully funded with debt; committed bridge financing in place
- Upon closing of the acquisition:
* Capital allocation priority is to deleverage. Strong free cash flow expected to drive down the net leverage ratio from around 2x at closing to below 1x net debt/EBITDA within three years
* Continue to pay a stable or increased dividend per share
Eindhoven, the Netherlands – Signify, (Euronext: LIGHT), the world leader in lighting, today announced that it has entered into a definitive agreement with Eaton to acquire Cooper Lighting Solutions for USD 1.4 billion (approx. EUR 1,270 million) in cash. Closing is subject to regulatory approvals and other customary conditions and is expected to take place in the first quarter of 2020.
Cooper Lighting Solutions, headquartered in Peachtree City, GA, United States, is a leading provider of professional lighting, lighting controls, and connected lighting. The business offers a large breadth of products and applications, both in the indoor and outdoor segments, sold under renowned brands in North America including Corelite, Halo, McGraw-Edison, Metalux. The company sells its lighting portfolio through a strong agent network and has direct relationships with retailers, distributors and other end-user customers. The business generated2 USD 1.7 billion of sales in 2018, of which 84% were LED-based, a reported EBITDA of USD 187 million and free cash flow of USD 143 million.