Exclusive Interview with Eric Rondolat, Signify Chief Executive Officer
EXCLUSIVE: MUST CREDIT EDISONREPORT.
It was a busy night for Signify and Cooper Lighting Solutions but their respective leaders made time for a quick call with our US editor, Randy Reid. Here is the conversation with Eric Rondolat, Signify Chief Executive Officer (CEO) and Chairman of the Board of Management
Reid: Why is Signify acquiring Cooper Lighting Solutions?
Rondolat: If you look at the lighting industry over the past three or four years, 20% to 30% of the companies in our industry have changed ownership. As the market leader we look at interesting moves that are available, specifically in the luminaires field. We have looked at all of the available companies and none fit our strategy criteria as well as Cooper Lighting does.
This is a confirmation of our belief in the American market—the North American Market. It is a big size, it is growing and very progressive. Our strategy calls for us to make the LED conversion first, next we move to connected lighting and third we see light as a language. The North America market is the most progressive for our strategy.
Reid: Were there specific things that you saw in Cooper that you didn’t see with the others?
Rondolat: We believe that our companies have a similar DNA, with a strong passion to innovation and sustainability. Cooper Lighting Solutions is a company very similar to ourselves as it focuses on lighting and it is being spun off by its parent. We have gone through a similar experience ourselves a few years back and have built a standalone company which is the world’s leading lighting company with mature processes and functions. The integration of Cooper Lighting Solutions will benefit from that experience. These are the reasons we have been in discussions with Cooper for the past month.
Reid: The press release states a $60 M savings, where will that come from?
Rondolat: The transaction is an opportunity to create substantial value and synergies. We do see a $60M synergy from the back office. We will keep the front offices separate. Agents, sales, marketing, and development of product—will remain independent, but there are some synergies for back office. Also, Signify has significant driver technology that can create an immediate benefit. With our size, we will see procurement savings and we will move the supply chain to a higher level of excellence.
Reid: What about Peachtree City?
Rondolat: There will be no change of the headquarters; the Cooper Lighting Headquarters will remain in Peachtree City.
Reid: Will Cooper and Signify compete head to head? Back when Larry Powers was the CEO of Genlyte, the Genlyte companies were separate profit centers, but for the most part, they were careful to not compete within Genlyte. How will you go to market?
Rondolat: Yes we will compete head to head in some instances but Cooper will be a Signify entity. As I said earlier, the front offices will remain separate. The message is clear. We will be one company and will have different reaches to the market. By going separate, we will maximize our ability to penetrate the market. Will there be areas were we compete? Yes today and yes tomorrow. The combined market share will be a much larger share. But we will fight outside of our own market. It is possible to fight for the same customer, but we will focus.
Reid: What will be the combined market share?
Rondolat: The combined entity is a very strong # 2 in the North America market for luminaires. In the global market, we are number one.
Reid: Are you concerned about approval from the US Department of Justice?
Rondolat: The closing is subject to regulatory approvals and we will go through them in a disciplined way. We have worked on the subject already.
Reid: We have heard rumors that Cooper might be sold instead of the spin-off, but we had no idea that Signify was the suitor. How did you keep this acquisition so quiet? No one was talking about it. Have you visited Peachtree City?
Rondolat: We have been working on this for about a month. Yesterday we met in Atlanta with management. The team was very limited and we worked hard to maintain secrecy. We have met a few people, a handful of people, and got to know them better. We are very comfortable with them. But no, we did not go to their headquarters. We took an early plane to Atlanta yesterday and returned back after a six hour meeting.
Reid: Any closing comments?
Rondolat: There is a huge amount of excitement here as we are bringing together two companies that share a genuine passion. We are investing in the lighting industry and these combinations are good for both companies and have the potential to do so much more together. This type of move between two companies that share the same passion reinforces our strong belief in our contribution to make the world better and improve lives. We are embarking on a fabulous journey.