Color Kinetics Inc. (NASDAQ: CLRK) today announced that it has entered into a definitive agreement to be acquired by Royal Philips Electronics (NYSE:PHG, AEX:PHI). Philips will pay $34 per share in cash for all shares and options, or a total consideration of approximately $791 million. The acquisition is subject to customary regulatory approvals and is expected to close in the third quarter of 2007.
Color Kinetics is widely acknowledged as the first to deliver complete, integrated systems for LED-based illumination that have since become a commonly adopted standard. The company has achieved over 15,000 installations, developed critical control and power technologies to enable next-generation systems, amassed a powerful patent portfolio encompassing 71 issued patents to date, licensed its technology in diverse markets beyond the lighting industry, and 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.
Upon close of the transaction:
· The merged entity 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 United States and Canada by Color Kinetics' sales force.
· The merged entity will be headquartered in Burlington, Massachusetts and will become the leading global research & development center 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," says Bill Sims, president and CEO, 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," says 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 foster the company's creative and entrepreneurial flair in the future while boosting growth by integrating it into the global lighting leader."