Cree Lighting changes hands again

In March 2019, Cree (now Wolfspeed) announced the sale of its lighting business Cree Lighting, which includes commercial, industrial, and consumer LED lighting fixtures, light sources, and solutions, to the family-owned company IDEAL INDUSTRIES, INC. Now, in less than five years, Cree Lighting has changed hands again.

On September 11, Advanced Lighting Technologies, LLC (ADLT) announced that its subsidiary CLNA Holdings LLC (CLNA) had acquired all equity interests in Cree Lighting from IDEAL INDUSTRIES, INC. and IDEAL INDUSTRIES (CANADA) CORP., including Cree Lighting USA, Cree Lighting Canada and E-conolight. It is worth noting that Cree Italy was acquired by ADLT in 2022.

History of Cree Lighting

Cree Lighting's history can be traced back to 1982, formerly Ruud Lighting founded by lighting designer and electrical engineer Alan Ruud. In 1998, Al Ruud sold Ruud Lighting to ADLT, a then public company, and three years later (2001) repurchased Ruud Lighting from ADLT, which returned to private enterprise status. In 2007, Ruud Lighting launched the industry's first widely adopted LED lighting fixture and maintained close cooperation with LED device supplier Cree. In 2011, Cree acquired Ruud Lighting and renamed it Cree Lighting. It has always had a large market share and influence in the field of LED indoor and outdoor lighting.

Later, due to the intensification of competition in the lighting market and changes in the global market structure, Cree successively sold its LED-related businesses and shifted its focus to compound semiconductor fields such as SiC silicon carbide and GaN gallium nitride. Among them, Cree Lighting was sold to the family business IDEAL in March 2019, and is now sold to ADLT, returning to its old owner.

Old owners of Cree Lighting

ADLT was founded in 1995 and later became famous as the Venture Lighting brand. It initially focused on metal halide technology and later transitioned to LED technology. ADLT has many companies in the United States, Canada, Europe, Asia, Australia and New Zealand. Its lighting group ALG mainly provides materials, components, systems, lighting fixtures and controllers.

ADLT said that this acquisition can be said to be a return to Cree Lighting. For ADLT, it is an important step in the growth strategy. This is another big step after the acquisition of Cree Italy in 2022, and there will be more acquisitions in the future. After the Cree Lighting brand is merged, ADLT's market position in the LED lighting field will be enhanced.

ADLT expects that after Cree Lighting joins lighting group ALG, it will achieve annual sales of approximately US$350 million and a total number of employees of more than 1,375, distributed in various business locations on five continents.

As for the seller this time, IDEAL is a leading manufacturer in the field of power control and management. At the time, Cree Lighting's product portfolio and SmartCast® technology were complementary to IDEAL's advanced controls business and supplier, distributor, agent channel and customer resources. Now, in order to accelerate growth and concentrate resources to fully seize opportunities in emerging markets, IDEAL has decided to transfer Cree Lighting.

Cree enjoys high visibility and market influence in the LED field, but later gradually withdrew from the LED market due to changes in the market environment and changes in company strategy. However, even after the LED and lighting business was sold, the Cree brand is still one of the representatives of high-quality, high-reliability products. After successively disposing of its LED business, Cree changed its name to Wolfspeed. Its development goal is clearly directed at the compound semiconductor market. In order to concentrate resources and better utilize its advantageous business, Wolfspeed also sold its radio frequency business not long ago.

Opportunities for Cree Lighting

From the seller's point of view, although the target markets are inconsistent, the decisions of IDEAL and Cree at the time showed that continuing to operate the LED lighting business would not add to the company's long-term development. Therefore, it is a wise move to divest non-core assets in a timely manner to not only harvest a sum of funds, but also to integrate resources to develop strong businesses.

From Cree Lighting's perspective, ADLT would be a suitable fit. The two parties have a common history, and the business can better form synergies, which will help Cree Lighting and ADLT Lighting Group ALG dig deeper into the LED lighting market segment.

According to TrendForce’s observation, in recent years, more and more international companies such as Royal Philips, Osram, and Cree have successively sold LED lighting-related businesses. Although it shows that the LED lighting industry is in an adjustment and transformation cycle, it also promotes an increase in market concentration and is conducive to companies that are deeply involved in the LED lighting market to further increase their market share.

Taking Cree Lighting as an example, there are still growth opportunities in the North American lighting market, including smart commercial & home lighting, high-power industrial lighting, etc. Cree Lighting has accumulated deep technical reserves and a large customer base, and is expected to enhance its position in the North American lighting market by leveraging the synergy with ADLT in the future.

ADLT's ability to repurchase Cree Lighting also proves that it recognizes the value of Cree Lighting. Acquiring Cree Lighting at this time is an effective way for it to expand its business scope and enhance its competitiveness. This may also be referred to Signify's acquisition of Fluence Lighting. From an industrial perspective, ADLT's acquisition of Cree Lighting also shows its optimistic attitude towards the prospects of LED lighting. It is worth looking forward to its future development.