Philips Electronics Strengthens LED Position By Acquiring Color Kinetics

Royal Philips Electronics announced it has reached an agreement with Color Kinetics Inc. under which Philips will acquire all of the outstanding shares of Boston-based Color Kinetics, a designer of lighting systems based on Light Emitting Diode (LED) technology.


Royal Philips Electronics announced it has reached an agreement with Color Kinetics Inc. under which Philips will acquire all of the outstanding shares of Boston-based Color Kinetics, a designer of lighting systems based on light emitting diode (LED) technology. The company has a broad technological portfolio covering important patents relating to intelligence and control technology for LED lighting. Color Kinetics also has in excess of 15,000 professional installations worldwide and an array of large, industrial customers in professional channels.

This merger builds on the acquisition of Lumileds in 2005, through which Philips ensured a leading position in high-power LED dyes, and on the recent acquisition of TIR Systems, which provided Philips with a strong line of fully-integrated solid state lighting (SSL)-modules used to deliver integrated lighting products to fixture manufacturers. With Color Kinetics, Philips will become a leader in SSL luminaires, establishing a strong presence in all aspects of the SSL value chain. This will further enhance Philips’ position to lead the future global shift to more energy-efficient lighting solutions, using LED sources.

"This acquisition uniquely positions Philips as a major player in the fast-growing SSL business with technology, expertise and intellectual property in all parts of the value chain of integrated LED-based lighting solutions," Theo van Deursen, chief executive of Philips’ lighting division, said. "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."

The market for SSL is at an inflection point for growth as the performance of LEDs measured in lumens per watt is rapidly becoming competitive with traditional light sources. While the market for SSL has up until now been driven by the application of color LEDs, technology in white light has improved significantly, which Philips expects will cause market growth to increase substantially going forward. Independent market sources project that the SSL addressable market will reach USD 20 billion to USD 30 billion in 2025 and is growing currently by approximately 30% per year.

Through this merger Philips and Color Kinetics expect to further accelerate growth in this area of the lighting market. Philips and Color Kinetics will drive to stimulate the speed of adoption of LED technologies and applications in the industry. By enabling Color Kinetics' innovative systems to be distributed and sold globally, the benefits of LED will be brought to a far larger market more quickly.

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