Royal Philips Electronics NV (NYSE: PHG), the world’s largest lighting company, has offered $688 million to acquire LED-maker Color Kinetics Inc. (Nasdaq: CLRK). CLRK management favors the deal, which would give them $34 per share, a 14% premium over its stock price. Color Kinetics shares have risen by about 50% since April 1 – it had sales of $65 million in 2006.
Philips Lighting CEO Theo van Deursen said the company is interested in Color Kinetics becaue of its patents on how LED lighting is controlled, specifically the software and hardware that makes it possible to adjust color and brightness.
Philips licenses the controls for its “Living Colors” color-adjustable LED lamps for the home market.
The acquisition, which is expected to be completed by year end, is Philips’ third targeting the LED market. It bought Agilent Technologies Inc. share of a joint venture for $950 million in 2005, and purchased Canada’s TIR Systems for $71 million in March.
Philips expects the LED market to grow by over 20% a year, reaching $20-30 billion in 2025. The company now dominates the entire LED supply chain.
Siemens AG is its major competitor in LED components.
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