GE to sell com­mer­cial light­ing unit as new CEO ex­tends over­haul

Gulf Times Business - - BUSINESS -

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.

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