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Philips to grab Color Kinetics for $0.8 billion

Dynamic lighting hot-shots Color Kinetics are picked to join Lumileds and TIR Systems on the Philips team, opening up a bright future for its award-winning lighting systems.

Dutch lighting giant Philips will purchase Color Kinetics (CK) for $34 per share, or $791 million in total, in a deal struck between the two companies.

The acquisition will give Philips a strong grip on the solid-state lighting (SSL) market, assuming it clears all regulatory hurdles and clinches the deal in the third quarter of this year as expected.

A spokesman for Philips confirmed the predictable threat posed to existing suppliers to CK, saying, “It makes all the sense in the world to use Lumileds LEDs now and exploit the synergies there. ”

Once the purchase is completed, CK will operate under the name “Philips Solid-State Lighting Solutions”, with premium and intelligent lighting lines to be co-branded “Philips/Color Kinetics”.

The new company will retain CK s current management and its sales force will add Philips' existing LED fixtures to its responsibility.

Company headquarters will move away from the prestigious location in the centre of Boston, behind the meeting house from which emerged the Boston Tea Party uprising, to Burlington, Massachussetts.

“We are glad the management are staying in place, and that the expertise stays in the company, ” Philips said.

“Color Kinetics has a very strong position in the US, but integrating with Philips will help open up other markets. ”

A giant boost for SSL?
“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, ” said Theo van Deursen, Chief Executive of Philips Lighting division.

Philips has solidified its position in LEDs by buying out some of the most prestigious companies in the industry, having bought Lumileds in August 2005, completing the acquisition of TIR Systems last week and now finishing the chain with Color Kinetics.

The three companies have had fruitful relationships in the past, working together to develop prize winning lighting systems for over five years, such as TIR s Destiny Colourwash (see related stories), "“ something that Philips will hope to continue.

“Lumileds is very strong in producing dice, TIR Systems is particularly strong in the middle part of the value chain, making modules which fit into lamps or luminaires, ” said the Dutch firm. “Now Philips owns Color Kinetics, our LED lighting line is further integrated still. ”

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