By BizLED Bureau
October 12, 2015: Bridgelux, a leading LED manufacturer, will be acquired by an investment group led by China Electronics Company (CEC) and ChongQing Linkong Development Investment Company. The company will operate as a CEC subsidiary under its existing management team in the US. Bridgelux also plans to spin out its Xenio-branded smart-lighting products in a separate company called Xenio Corp. In conversation with BizLED.co.in, Tim Lester, Chief Financial Officer and Chief Operating Officer, Bridgelux, explains the company?s operations after the merger and its impact.
How will the new developments affect Bridgelux?
With the new transaction, Bridgelux will be able to expand its reach even further into the Asian countries by fully leveraging CEC?s manufacturing capabilities to achieve long term cost benefits. Bridgelux will also be able to quickly expand its product offerings in the coming months at every level?die, SMT, COB and module.
How has Bridgelux performed since last year?
Bridgelux entered into the merger with CEC with a strong balance sheet, a track record of growth and improved financial performance and a plan for IPO. However, this merger strengthens our strategic position in the market and opens opportunities for an accelerated period of growth without taking an IPO off the table.
What will be the impact of the merger with CEC?
We have recognized that the LED industry would enter a period of consolidation where cost structure would become more critical than ever. In 2015, that time arrived and we acted. Leveraging CEC?s financial strength and investments in the supply chain, Bridgelux will be able to aggressively attack new segments and applications with innovations that serve those unique market requirements. This is a complementary combination by adding Bridgelux?s channel, developed with record of innovations, quality and industry leading customer service, to the manufacturing capabilities that will deliver long-term cost benefits for customers.
Will Bridgelux operate independently or jointly with the partners? How will Bridgelux work on marketing, R&D and production?
Bridgelux will continue to operate as a standalone business and add value through IP, experience, development, etc, in order to sell leading LED components sourced from our partners and promoted under the Bridgelux brand and protected by the Bridgelux quality program. Our sales, marketing and development teams will continue to work on our existing product roadmap but will supplement it with opportunities to add new products at every level, (die, SMT, COB and module) through cooperation with our partners.
What is Bridgelux?s core competitiveness and how will you maintain these advantages?
Bridgelux has a long track record of innovation with milestones such as introduction of COB in 2009 and GaN/Si in 2013. We will continue to invest to bring innovative products to market with our core light engine development team. Bridgelux is known for quality and industry leading customer service. These are the differentiators that set us apart and attracted CEC. The team that has been long established to maintain and improve performance will still be working hard at Bridgelux.
What are Bridgelux?s next development goals?
Bridgelux will introduce its high lumen density (H series) platform later this year and we are excited with the promise of these products, not only for applications that require tight beam spot (such as track lighting) but also for the longer-term implications to lumen per dollar competitiveness. Bridgelux will also continue to work with its smart lighting group and just announced release of its first smart lighting product. As part of this transaction, Bridgelux is spinning off its smart lighting business into a company called Xenio to develop product solutions in this space. CEC will have an ownership interest in Xenio as well as provide manufacturing capabilities. However, Bridgelux will sell Xenio products. In this way, the Bridgelux team can drive improvements in the light engine performance while expanding its product offering and market reach while Xenio develops the IoT (Internet of Things) solutions that will eventually sit on top of the light engine.
What?s your opinion on the current LED lighting market?
The market right now is difficult with only very near-term visibility to demand, which has caused some of our larger competitors to do very unnatural and unhealthy things to the pricing environment. However, this is only temporary and the larger promise of solid-state lighting for both domestic and export markets is very much alive. The consolidation occurring in the industry is good for the future by ultimately providing alignment of the value chain for efficiency in current costs and with the innovation cycle.
The LED lighting industry has been facing several challenges. Has Bridgelux encountered any difficulties?
There are both challenges as well as opportunities in the LED lighting industry. Bridgelux has always focused on a total value proposition, which includes not only leading performance but also high quality standards and industry leading customer service levels, while maintaining competitive pricing. Hence, it has not been touched by the recent challenges faced by the industry.