(Corrects name in paragraph 11 to “Signify” from “Philips”)
AMSTERDAM, Oct 15 (Reuters) - Signify, the Dutch-based lighting company, said on Tuesday it has agreed to buy Cooper Lighting Solutions of the United States from Eaton Corp for $1.4 billion in cash.
Signify’s Chief Financial Officer Stephane Rougeot said his company, the world’s largest lighting maker, has had a second-place position in the global professional lighting market and suffered from a lack of scale in North America where it competes with Acuity Brands Inc among others.
“The rationale from a strategy standpoint is to get a much stronger market position in North America in professional,” he said in a telephone interview.
“With Cooper we are getting a very large player in North America professional. They have great market positions, they have a large agent network, they have very deep customer relationships, they have great brands over there.”
The acquisition is the largest by Signify, the former Philips Lighting, since it was spun off from Philips in 2016.
Signify said the deal would add to earnings per share in the first year, and would lead to cost savings of $60 million annually within three years.
Closing of the deal is expected in the first quarter of 2020 pending regulatory approvals, Signify said.
Cooper Lighting Solutions is headquartered in Peachtree City, Georgia. It sells professional lighting and controls under the Corelite, Halo, McGraw-Edison and Metalux brands, Signify said.
Cooper reported 2018 sales of $1.7 billion, and earnings before interest, taxes, depreciation and amortisation (EBITDA) of $187 million.
Signify said it intends to keep dividends steady or increase them after the acquisition, but its main focus will be to reduce debt of the combined company from two times net debt to EBITDA to one time in the coming three years.
During that time Signify will de-prioritize further merger and acquisition activity, Rougeot said. (Reporting by Toby Sterling in Amsterdam Editing by Matthew Lewis and Lisa Shumaker)