Go Scale Capital, an investment group, agreed to buy most of Philips’ lighting components division for $2.8 billion. The transaction, announced March 31, involves 80.1 percent of Philips’ lighting components division, including its automotive and “Lumileds” LED manufacturing business.
Go Scale Capital is an investment group backed by GSR Ventures, with offices in Hong Kong, Beijing and Silicon Valley, and Norwalk, CT-based Oak Investment Partners. Other partners include Asia Pacific Resource Development, Nanchang Industrial Group and GSR Capital.
Analysts reported earnings for Philips’ lighting components division at 141 million euros in 2014, on sales of 1.42 billion euros. Based on the price fetched for the 80.1 percent of that unit, the unit as a whole, with debt, was valued at $3.3 billion.
As Go Scale Capital focuses on Philips’ automotive and other LED business opportunities, with a customer list that includes VW, BMW and Audio, Philips is reportedly turning more attention to its medical technology and selected consumer electronics businesses.
Go Capital worked with London-based Zaoui & Co. on the deal. Philips was advised by Morgan Stanley. Philips’ shares hit a 14-month high of 27.675 euros earlier in March, and the lighting components business unit transaction price exceeded analysts’ expectations.
Along with the favorable selling price, Philips had been looking to reduce the overlap that puts the company in a position of competing with customers for the same end users.
