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Cree Inc of Durham, NC, USA, which manufactures LED solid-state lighting components, has signed a definitive agreement to acquire privately held LED Lighting Fixtures Inc (LLF) of Morrisville, near Research Triangle Park, NC, USA, for about $77m in cash and stock, plus up to a further $26.4m over the next three calendar years (tied to new product milestones and key-employee retention).

LLF was co- founded in September 2005 by chairman and CEO Neal Hunter, who was also a co-founder of Cree in 1987 and its chairman and CEO until leaving in April 2005 . Hunter will rejoin Cree as president of the renamed Cree LED Lighting Solutions. The rest of LLF’s management team will continue in their roles.

LLF develops LED lighting retrofit products and is recognized as the first firm to develop a viable, energy-efficient LED down-light for general illumination, it is claimed, based on combining Cree’s lighting-class XLamp LEDs and LLF’s patented color-mixing technology. The product is being used in commercial and residential applications.

Cree reckons that the acquisition will expand its market opportunity by providing direct access to the lighting market, enabling it to drive retrofit solutions to convert existing lighting infrastructure to energy-efficient lighting and to accelerate the adoption of LED lighting. Cree's business will hence now encompass LED chips, components and lighting systems.

“The combination of Cree’s lighting-class LEDs and LLF’s lighting-systems technologies should set the stage for Cree to obsolete the light bulb,” claims the form’s CEO Chuck Swoboda. “We believe the market is at a tipping point, with billions of sockets in existing fixtures now addressable with energy-efficient LED lighting. Accelerating this market transformation benefits Cree, our LED customers and lighting consumers.”

Cree aims for the acquisition to add about $30m of revenue in fiscal 2009 from the combination of growing LLF product sales and synergies with Cree’s other LED product lines. For fiscal 2009, it forecasts that the acquisition will be slightly dilutive to earnings per share on a GAAP basis, and slightly accretive to earnings per share on a non-GAAP basis (excluding amortization of acquired intangibles and stock-based compensation). Providing that the transaction closes in early March (as intended), Cree targets that the acquisition will add about $1m to its consolidated revenue and reduce earnings per share by about $0.01 for its fiscal third quarter.

“Cree is as passionate as we are about moving the lighting market forward and making an impact on energy consumption into the next decade and beyond,” says Hunter. “This acquisition should make Cree a powerful force for innovation around cutting-edge LED lighting solutions,” he adds.

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Cree considers adding Asian chip fab in next few years

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