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.”
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
RACINE — U.S. Rep. Bryan Steil, R-Wis., was not surprised when he heard on Friday that President Donald Trump vetoed the bill that would terminate his declaration of a national emergency on the southern border.
Steil, who represents the 1st Congressional District in Congress, voted against the legislation to terminate the national emergency and thought Trump’s allocation of funds for a border wall was appropriate.
Now, it will be up to the House and Senate to decide whether to try to override the veto by passing the legislation with a two-thirds majority.
“My vote won’t change,” said Steil, whose district includes all of Racine County. “My guess is it will pass the House but (the vote is) below a veto proof threshold (in the Senate).”
Steil was speaking to The Journal Times Editorial Board on Friday when news of the veto broke.
Despite agreeing with Trump on the issue of migrants on the southern border, Steil said he does believe that the National Emergencies Act, which gives the president the power during a crisis, “should be reviewed” and Congress “should take back a lot of that power.”
“I’m in the process of digging through the legal structure with a few colleagues,” Steil said. “You also don’t want to bring it back to zero because there are instances where that is the right delegation (of power) from Congress to the president.”
Steil said bills are being drafted in regard to the National Emergency Act.
The issue of families crossing through the southern border is something Steil calls a “humanitarian crisis emergency.”
“Families are coming across, they’re being trafficked by coyotes,” Steil said. “There’s a real serious human side of this that they’re not addressing.”
Steil said there is a “push-pull factor” when it comes to the motivations of people coming to the United States that are as old as the country itself.
“There are reasons why many of these individuals are leaving their home,” Steil said, adding that it’s possible his Irish descendants might not have come to the U.S. if things had been better in their homeland.
“But for a food famine, my guess is great-great-grandpa Fallen might not have left Ireland,” Steil said. “I think there’s a real opportunity to have a thoughtful approach to how we address some of the security concerns that we’re seeing in a small number of Central American countries.”
The rhetoric on immigration, particularly when it comes to a border wall, is being lost in the conversation Steil said.
“The linear focus on the wall doesn’t solve the whole problem,” Steil said. “The wall is a piece of a broader puzzle. That broader puzzle involves technology, it involves manpower and physical structures in critical areas. So I think we need to have a broader conversation in a nonpartisan way where we bring the temperature of the room down and discuss how we’re going to gain strategic control of the southern border.”
“I think we need to have a broader conversation in a nonpartisan way where we bring the temperature of the room down and discuss how we’re going to gain strategic control of the southern border.” U.S. Rep. Bryan Steil, R-Wis.
STURTEVANT — The employees of Cree will soon be working for a company that prides itself on investing for the next generation.
On Friday morning, Durham, N.C.-based Cree, a manufacturer of LED lighting, announced a deal to sell its entire lighting business to Ideal Industries of Sycamore, Ill., for $310 million. Cree employees were informed in meetings that started at 8:30 a.m. here, as the news announcement was issued. The deal is expected to become final during the next quarter.
Later in the day, Meghan Juday, vice chairman and part-owner of Ideal, talked about the fourth-generation company’s philosophy and what Cree employees — including those at 9201 Washington Ave., where Cree has both manufacturing and administrative operations — can expect from the business’ next owners.
It was Juday’s great-grandfather J. Walter Becker who started Ideal Industries in 1916 when he developed a commutator stone that was used for elevator motor maintenance, Juday explained. He started out making the commutator stone in his mother’s kitchen, Juday said, and his company grew from there.
Today, Ideal has about 1,500 employees and is best known for its hand tools and supplies for the electrical market, Juday said. The company has operations in about 20 countries including multiple ones in the United States. It also manufactures in Canada, the United Kingdom, China, Australia and New Zealand, she said.
“We try to manufacture where our customer base is,” Juday said.
In acquiring Cree Lighting, Ideal will add about another 1,500 employees, she said, including roughly 1,000 in Sturtevant.
Even before the Cree purchase, Juday said, the owners of Ideal Industries already had affection for Wisconsin. There are about 50 family members, some of them live in the Badger State and others vacation here.
Juday said about Ideal’s coming acquisition of Cree Lighting: “I think it’s going to be good for (the employees). Our philosophy around acquisitions is that we buy, invest in resources and people and try to help them become even better. … I expect they will benefit.”
Ideal Industries has a philosophy of “patient capital,” Juday said — meaning, it invests for 10 years, 15 years, even for the generation.
“We will continue to invest in operations (in Sturtevant) and help them to reach maximum profitability.”
There is no plan to consolidate Cree Lighting operations into Ideal’s home base, Juday continued.
“We bought Cree because we like the Cree Lighting brand,” she said. “We have a decentralized portfolio of businesses and a very small corporate headquarters.”
However, Ideal will draw upon its existing talent and resources to help Cree Lighting in any ways that make sense, Juday said.
“We will use our resources from around the world to help, and to solve problems,” she said. “We have a lot of talent and expertise.”
Ideal also has what will be a very complementary sales force, Juday said, and can sell Cree Lighting products through its electrical distribution channel.
“I think it will be an additive partnership.”
Juday said Ideal has no plans to change the Cree name any time soon. “It’s a great brand for us,” she said. Although she acknowledged the name could potentially evolve over time, there are no plans for any immediate name change.
“We will continue to invest in operations (in Sturtevant) and help them to reach maximum profitability.” Meghan Juday, vice chairman of Ideal Industries