GE to sell commercial lighting unit as new CEO extends overhaul
General Electric Co agreed to sell its commercial lighting division to American Industrial Partners, as new chief executive officer Larry Culp streamlines the industrial giant’s manufacturing portfolio.
The sale to the private equity firm, financial terms of which weren’t disclosed, is one of Culp’s first public moves to get GE back on track after disclosing an expanded accounting federal probe and worsening troubles at the power-equipment business. GE an- nounced Culp’s surprise appointment October 1 after its shares lost more than $100bn in market value under the 14-month tenure of his predecessor, John Flannery.
American Industrial’s purchase of the unit, which is known as Current, is expected to close early next year, subject to customary conditions, the companies said in a statement on Tuesday.
Current offers energy consulting services to businesses and municipalities that help them control and lower their power costs by digitally managing their lighting systems. It’s part of a division that includes a consumer light-bulb business that GE also is attempt- ing to sell. With revenue of $385mn, the overall lighting division accounted for just 1.3% of GE’s total in the third quarter. Segment profit rose 86% to $26mn. GE has announced at least $10bn in asset sales over the last 12 months, including its century- old rail business in May, as it focuses on aviation, power-generation equipment and renewable energy. The Boston-based company sold the bulk of its international and automotive lighting businesses earlier this year.
AIP has more than 90 transactions completed and $4.2bn of assets under management, according to Tuesday’s statement. Its portfolio companies employ more than 51,000 workers and have combined revenue of about $12bn, according to its website. Maryrose Sylvester, the CEO of Current, will continue to run the business.
“GE’s history of innovation, quality, reliability and deep domain expertise is an ideal fit with our investment strategy,” AIP partner Eric Baroyan, said in the statement. “We look forward to continuing that legacy by supporting Current’s management team.” UBS Group AG acted as lead financial adviser to GE, and Sidley Austin acted as lead legal adviser. Greentech Capital Advisors and Wells Fargo & Co also advised GE.