Lumenpulse Completes the Asset Acquisition of Projection Lighting Limited
Lumenpulse Inc. (TSX: LMP), a leading manufacturer of high performance, specification-grade LED lighting solutions, is pleased to announce that it has completed its previously-announced acquisition of substantially all of the assets of Projection Lighting Limited, a UK-based manufacturer of LED solutions for retail, display and architectural applications for a purchase price of $30.4 million (GBP 16.6 million), which was paid in cash. All customary closing conditions were met.
Founded in 1991, Projection was a privately owned company headquartered in Manchester, UK, operating under the name AlphaLED. The company’s strong position in the UK was recognized in 2013 with a Lux Award for Manufacturer of the Year.
The transaction will allow Lumenpulse to expand its addressable market with a wide variety of complementary LED solutions; and accelerate its expansion into new geographical markets served by Projection.
“We are pleased to join forces with a reputable player in the LED lighting industry,” said François-Xavier Souvay, President and CEO of Lumenpulse. “We were drawn to well-designed, versatile and high-performance products, which are in line with the Lumenpulse philosophy. We will also welcome an experienced management team with deep industry knowledge,” he said.
“Combining strengths will create added momentum for growth,” said Gary Heald, Founder and CEO of Projection. “By expanding our products into each other’s channels and markets, there is great potential for revenue enhancement synergies. For Lumenpulse, it opens new doors in the retail, hospitality and museum markets, while Projection’s products have the possibility to integrate Lumenpulse’s proprietary and patented technologies, and access North American channels,” he said.
The definitive agreement provides for a total cash consideration of $30.4 million (GBP 16.6 million), including working capital of $5.3 million (GBP 2.9 million), subject to customary post-closing adjustments. The consideration will be paid using Lumenpulse’s available cash on hand.
During the twelve month period ended April 30, 2014, Projection generated revenues of $20.6 million (GBP 11.3 million) and EBITDA of $4.3 million (GBP 2.3 million). The acquisition is expected to be immediately accretive notwithstanding the investments to be made to integrate Lumenpulse’s technologies into Projection’s products, obtain necessary North American compliance certification and deploy the required sales force and sales support to promote Projection’s products.
As a result of the transaction, approximately 50 new employees will join Lumenpulse. As part of their new remuneration package, Lumenpulse will grant restricted stock units (“RSUs”) having an aggregate value of approximately $1.8 million (GBP 1 million) to certain key employees. The RSUs will vest over a three-year period.
Gary Heald, President and CEO of Projection, will serve in an advisory role following completion of the transaction.