Philips to Sell Majority Interest in Lumileds to Apollo Global Management

December 12, 2016

Royal Philips has signed an agreement to sell an 80.1% interest in Lumileds, a leading supplier of LED components and automotive lighting, to funds managed by affiliates of Apollo Global Management, LLC. Philips will retain the remaining 19.9% interest in Lumileds for a minimum of three years. 

The transaction values Lumileds at US$2 billion, including debt and debt-like items. Philips expects to receive cash proceeds, before tax and transaction-related costs, of approximately US$1.5 billion and participating preferred equity. The transaction is expected to be completed in the first half of 2017, subject to customary closing conditions, including regulatory approvals. 

“With this transaction, we will be completing an important phase of the transformation of our portfolio and I am satisfied that in the Apollo managed funds we have found the right owner for Lumileds,” says Frans van Houten, CEO of Royal Philips.

“In line with our strategic focus on health technology, Lumileds has been operating as a standalone company within Philips since early 2015. With Apollo managed funds acquiring a majority interest in Lumileds and partnering with Philips, Lumileds is now well-positioned for further growth and value creation, building on its robust innovation pipeline, technology leadership and strong customer base.”

Apollo is a global alternative investment manager with assets under management of approximately US$189 billion in private equity, credit and real estate funds, invested across a core group of nine industries. Apollo managed funds have a long and successful track record of acquiring and growing businesses in partnership models of co-ownership with former parent companies.

“We are extremely excited about the opportunity for our managed funds to acquire Lumileds,” says Robert Seminara, Senior Partner at Apollo. “We look forward to partnering with Philips and the outstanding management team and employee base at Lumileds, and bringing in Apollo’s resources to support the continued growth and innovation of this industry-leading business.”

“I am convinced that together with the Apollo managed funds, Lumileds will sharpen its focus and accelerate innovation in its leading product portfolio of lighting components,” says Pierre-Yves Lesaicherre, CEO of Lumileds. “With our strong R&D programs and intellectual property, we are ready to address the current and future needs of our customers. Lumileds will work closely with its industry partners and customers and capture growth opportunities in an exciting industry.”

Lumileds is a leading supplier of lighting components to the general illumination, automotive and consumer electronics markets with operations in more than 30 countries and has approximately 9,000 employees worldwide. In 2015, Lumileds generated sales of approximately US$2 billion.