If takeovers by larger foreign companies are a sign of a country’s buoyant lighting market, then things are well afloat in the UK, where overseas groups this month alone have acquired two lighting firms.
First, Japan’s Endo Lighting picked up Warrington-based family run Ansell, followed quickly by Sweden’s ITAB acquisition of Hertfordshire-based Profile Lighting.
Osaka-based Endo, a ¥38.8 billion (£209 million) 47-year-old company known for its LEDZ brand of LED lighting products, acquired Ansell for ¥6.5 billion, or roughly £35 million.
‘We are pleased to announce that Ansell Electrical Products Limited and Ansell (Sales & Distribution) Limited have been acquired by Endo Lighting Corporation of Japan,’ Ansell announced in a short press release. ‘Ansell will now operate as a wholly owned subsidiary of Endo, but will continue to be run by its former shareholders…The acquisition of Ansell will allow Endo to accelerate their international growth through the Ansell brand.’
One interpretation: With the UK economy recently outpacing other developed countries, now is a good time to expand through acquisition in the country.
‘Accelerated international growth’ could be just what Endo needs to help it reverse a financial slide – its ¥38.8 billion revenue in the fiscal year ending March 31, 2014 was down 2.5 percent from the previous year. But more notably, net income in the same period tumbled a whopping 68 percent to ¥4.1 million (a mere £22,000).
Earlier this year, Endo blamed the difficulties in part on some of the same factors that have bedeviled traditional lighting companies like Philips, Osram and General Electric, including ‘intensifying competition’ and ‘a decline in the selling prices of the some of the company’s products.’ Samsung and Australia’s Gerard have also struggled, with Samsung recently exiting the LED lamp business.
One of the biggest challenges facing older lighting companies is that new LED-only entrants have arrived unencumbered by a legacy lighting business.
At the same time, competitors are emerging from outside the traditional lighting industry, as internet, IT and even automobile companies like BMW start tapping into the digital nature of LED lamps (LEDs are semiconductors that emit light).
‘With new entrants from outside our industry, the competition in the market of LED lighting fixtures is expected to further intensify in the foreseeable future,’ Endo said last spring when it reported its results. ‘To survive the severe competition, it is essential to put forth further efforts to develop new products that appeal to the market. When developing new products, we will seek not only to enhance energy-saving performance but also to upgrade overall product functionality, thereby achieving continued growth in sales and profits.’
Meanwhile, Sweden’s ITAB Group appears to be counting on a revival of the UK’s high street retail shops, known for having taken a beating throughout the prolonged recession that has ended. Jönköping-based ITAB and its ITAB Shop Concept group specialise in selling fittings like checkout counters and lighting to retail chain stores. The £305 million (3.57 billion Swedish kroner) company claims to be the leading supplier of such products in the Nordic and Baltic countries and in the UK.
Its £1.8 million acquisition of £8 million Bishop’s Stortford-based Profile strengthens its lighting offering.
‘The acquisition will enable ITAB to provide its UK customers with a combination of local lighting knowledge with global sourcing of lighting products,’ ITAB said in a press release.
That, in turn, could help ITAB float its financial boat.
Photo is from ITAB via Flickr