Color Kinetics has achieved over 15,000 installations worldwide with its LED lighting technology, and has famously amassed a powerful patent portfolio encompassing 71 issued patents to date. The company licenses its technology throughout the lighting industry, and has worked alongside government agencies to promote the advancement of LED lighting as the best long-term choice for energy efficiency. "The acquisition by Philips will dramatically fortify the combined company's reach and efforts to make its technology the de facto platform for intelligent LED lighting worldwide," say CK.
For Philips, the merger builds on the acquisition of Lumileds in 2005, through which Philips ensured a leading position in high-power LED dyes, and on the recent acquisition of TIR Systems, which provided Philips with a strong line of fully-integrated Solid State Lighting (SSL) modules used to deliver integrated lighting products to fixture manufacturers. "With Color Kinetics, Philips will become a leader in SSL luminaires, establishing a strong presence in all aspects of the SSL value chain. This will further enhance Philips' position to lead the future global shift to more energy-efficient lighting solutions, using LED sources," the company says.
Color Kinetics had 2006 sales of approximately US$65m, and sales have grown at a compound annual growth rate of 31% in the period 2001-2006. Operating margins are now expected to increase as the company benefits from economies of scale.
Upon completion of the transaction, the new company will operate under the name Philips Solid-State Lighting Solutions, with intelligent and premium LED product lines ultimately co-branded Philips/Color Kinetics; Philips' and Color Kinetics' LED fixtures and Color Kinetics' OEM modules will be marketed under the co-brand in the US and Canada by Color Kinetics' sales force; The merged entity will be headquartered in Burlington, Massachusetts and will become the leading global research & development centre of innovation for all LED-based fixture or "luminaire" product lines. The LED luminaire portion of Philips' existing North American operation in New Jersey will be merged with the Burlington operation; Color Kinetics will cease to be publicly listed on the Nasdaq stock exchange.
"We have long said that LEDs are the future of illumination - not a passing novelty - and we've supported that view with unwavering focus on the research and development of new technologies, sales channels, partnerships and industry initiatives to make it a reality. Today we announce our biggest and most significant step towards putting our core technology and IP at the heart of every future application of intelligent LED lighting," said Bill Sims, president and CEO of Color Kinetics. "We believe that joining Philips, the global lighting leader, is in the best interest of our shareholders, customers, partners, and employees, and that our combined resources will produce the best possible entity to drive the LED lighting revolution forward."
"This acquisition uniquely positions Philips as a major player in the fast-growing solid-state lighting business with technology, expertise and intellectual property in all parts of the value chain of integrated LED-based lighting solutions," said Theo van Deursen, chief executive of Philips' Lighting division. "The technological platform obtained through this acquisition will serve as a springboard for Philips to further create sustainable value through making innovative LED lighting solutions widely available. We admire Color Kinetics' expertise, which they built up in only 10 years of existence, and we will
