China investors agree $3.3b deal for Philips LED unit

Go Scale is sponsored by GSR Ventures and Oak Investment Partners. Other co-investors in the deal include Asia Pacific Resource Development and government-backed Nanchang Industrial Group.

Philips will retain an interest of 19.9% in the unit. The Netherlands-headquartered company is expected to receive $2.8 billion in cash from the divestment, plus a deferred contingent payment of up to $100 million.

Following the spin-out, the unit will be renamed Lumileds and operate under the leadership of CEO Pierre-Yves Lesaicherre. Sonny Wu, co-founder and managing director of GSR Ventures and chairman of Go Scale Capital, will serve as interim chairman of Lumileds.

"The Lumileds acquisition will be a perfect example of how Go Scale turns cutting edge technologies into world class companies," Wu said in a statement. "Go Scale Capital will focus on expanding Lumileds' opportunities by investing in its global centers of operation and in the fast growing general lighting and automotive industries."

With bases in China and Silicon Valley, GSR Ventures primarily invests in technology start-ups, with a focus on semiconductors, internet, mobile, new media and cleantech. The firm has made at least six investments in China's LED space such as SunSun Lighting, Lattice Power Corporation, Lattice Lighting, Dalian Golden Sanwei Technology, Shineon and Times Energy Corp.

In the automotive technology space, the VC partnered with the Chinese government, Oak Investment and Stockholm-based Foundation Asset Management to commit $125 million to Boston-Power, an US-based electric vehicle batteries maker, in 2011. This was done with a view to bolstering the company's manufacturing, R&D and business development activities in China.

Go Scale plans to expand Lumileds' business in China, building on Philips' existing customer base which includes BMW, Volkswagen and Audi. "We expect to see significant growth and unparalleled inroads into new opportunities such as electric vehicles," Wu added.

Lumileds supplies lighting components to the general illumination, automotive and consumer electronics markets with operations in more than 30 countries. It reported $2 billion in sales last year and a double-digit EBITA margin.

Rival bidders for the Philips unit came from a CVC Capital Partners and KKR consortium as well as from Bain Capital, Reuters reported. The Chinese group entered the bidding in mid-March. Wu said that informal negotiations with Philips began in June of last year.

Go Scale, which manages a stand-alone fund of at least $500 million, is a growth stage investment platform under the GSR Capital families of funds. It targets cross-border deals, bringing in co-investors to acquire mature and advanced technologies.

The Lumileds transaction is expected to close in the third quarter of this year.

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• Topics
• Greater China
• Buyouts
• Technology
• Cleantech
• China
• Outbound investment
• M&A
• buyout
• GSR Ventures
• Technology
• Cleantech