Temasek, partners said to be bidding for Philips’ lighting business

Philips has been producing lighting components for over a century. Image from company brochure.

A consortium that includes Singapore’s Temasek, a Chinese startup and GSR Ventures has formed to bid for Philips’ 2.5 billion euros ($2.6 billion) lighting components business, following a Reuters sources report.

Chinese light-emitting diodes (LED) startup Lattice Power, working with Singapore state fund Temasek and China venture capital firm GSR Ventures, has expressed interest in the business. This could potentially thwart the chances of rival bids from buyout groups, Reuters quoted its sources on the matter.

“They have put in a last-minute bid,” one of the sources said. The bid is expected to have been competitive as it would otherwise have no chance at this stage of the auction.

Another source said it was “unclear if their (the Chinese’s) chances are very big”.

Sources said Philips’ adviser Morgan Stanley aims to enter exclusive talks with one of the bidders early next week, wrapping up a process which started a year ago when the Dutch electronics group combined its so-called Lumileds and car lights divisions into a standalone company.

Among other bidders are a consortium of private equity firms CVC and KKR, which tabled a leading bid this month, while Bain Capital made a runner-up bid having had the chance the hike its own offer.

Spokespeople for Philips, CVC, KKR and Bain Capital declined to comment, while representatives for Lattice, GSR, Temasek and Morgan Stanley were not available for immediate comment.

Lattice Power, a small company which last year secured $80 million in funding by Asia Pacific Resources Development Investment, already has some connection to Philips, as it made James Haworth, a former Philips executive, the head of its US operations.

GSR is a venture capital fund that invests primarily in early and growth stage technology companies with substantial operations in China.

Philips, which has been making light bulbs for 123 years, has vowed to focus on higher-margin activities under pressure from Chinese makers of LEDs.

In 2014, Philips’ Lumileds/Automotive business posted earnings before interest, tax and amortisation of 172 million euros on sales of 1.42 billion euros.

Its competitors such as Hella, Cree and Acuity trade in a range of 6.6 to 13.4 times expected earnings before interest, taxes, depreciation, and amortisation.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.