STURTEVANT — Lighting giant Cree, which has administrative and manufacturing facilities in Sturtevant, on Friday announced an agreement to sell its entire lighting products business unit, Cree Lighting, to Ideal Industries for approximately $310 million.
Durham, N.C.-based Cree is the company that bought the former Ruud Lighting in 2011 for $525 million and absorbed it. Cree Lighting includes the LED lighting fixtures, lamps and corporate lighting solutions business for commercial, industrial and consumer applications.
Cree said in a news release that the agreement to divest its lighting business continues Cree’s strategy, announced in February 2018, to create a more focused, “powerhouse” semiconductor company. It said the sale provides growth capital for Wolfspeed, Cree’s core power and radio frequency business, and equips Cree with additional resources to expand its semiconductor operations.
No information was immediately available Friday morning about the potential impact on Cree’s existing operations at 9201 Washington Ave., Sturtevant, where the company has an estimated 1,000 employees.
The closing of the transaction is anticipated to occur in the second quarter of this year, subject to receipt of required regulatory approvals and satisfaction of customary closing conditions.
According to the announcement, Ideal is a fourth-generation, family-owned, growing global company that is a market leader in electric power control and management. The Sycamore, Ill.-based company was founded in 1916.
Its website lists products categories including: hand tools; wire connectors, connection and management; energy efficiency; environmental testing and monitoring; aerospace; and electrical test and measurement.
According to Cree’s announcement, its lighting portfolio and technology complement Ideal’s advanced control business and channel of suppliers, distributors, agents and customer relationships.
“Our combined technology and expertise will continue to build on Cree Lighting’s history of leadership and fits with the advanced systems Ideal has pioneered over the past 103 years,” stated Jim James, chairman and CEO of Ideal Industries. “Together, we will create a powerful combination of innovation, channel strength and operational excellence. We’re acquiring a very special business poised for sustained success, and we look forward to assisting Cree Lighting in realizing its potential.”
Sharper focus on semiconductors
Cree stated that it has “made significant progress during the last 18 months in sharpening the focus of our business to become a semiconductor powerhouse,” has grown its Wolfspeed business by more than 100 percent, acquired the Infineon radio frequency business, more than doubled its manufacturing capacity of silicon carbide materials, and signed multiple long-term supply agreements that exceed $500 million.
In mid-2016 Cree announced it intended to sell its Wolfspeed Power and Radio Frequency Division to Infineon Technologies AG for $850 million in cash. However, regulators blocked that deal.
“With the addition of today’s lighting divestiture news, Cree is well positioned as a more focused semiconductor leader,” stated Cree CEO Gregg Lowe. “Cree’s technologies are at the forefront of the automotive industry’s transition to zero emission electric vehicles, the telecommunications industry’s move to faster 5G networks and the continued ramp-up of LEDs for specialty applications.”
“This transaction provides significant resources to help accelerate Wolfspeed’s growth while providing a terrific growth opportunity for the lighting business and its employees through an expanded channel that strengthens its market position,” Lowe stated.
Lowe said Cree believes the divestiture decision benefits Cree, its employees, shareholders and customers.
“Our combined technology and expertise will continue to build on Cree Lighting’s history of leadership and fits with the advanced systems Ideal has pioneered over the past 103 years.” Jim James, chairman and CEO of Ideal Industries