Hubbell sells home lighting business for $131 million

As the market competition landscape changes and the market environment continues to be sluggish, a new development trend will form in the LED lighting industry in 2023. More and more companies are beginning to adjust their LED lighting business and devote more resources to tracks other than lighting. While maintaining current corporate profitability, they will also find new development points for the future of the company.

On December 21, Hubbell, a well-known American company, announced that it had signed a final agreement to sell its Residential Lighting Business to Kingswood Capital Management, LP, an American private equity fund, for US$131 million (approximately RMB 934 million). The transaction is expected to be completed in the first quarter of 2024.

Hubbell once again sold its lighting business to focus on electrical and power grid businesses

The Hubbell Group was founded in 1888. The company is headquartered in Shelton, Connecticut. The company's founder, Harvey Hubbell, was the inventor of the pull-cord switch. This century-old company currently mainly includes four major business segments, namely Lighting & Controls, Wiring & Electrical, Power & Utilities, and Datacom.

Among them, the lighting and control segment mainly sells indoor, outdoor, decorative, emergency lighting products, as well as lighting controls, lighting inverters, etc.;

Under the influence of multiple factors such as the global economic downturn, rising energy costs, downturns in the real estate cycle, and repeated pandemics in recent years, the demand for home and commercial lighting markets has shown a downward trend. Although demand in some lighting markets has recovered this year, short-term growth is still insufficient.

In this context, Hubbell has previously Begins to downsize and sell lighting business. In 2021, Hubbell sold the Commercial and Industrial Lighting Business to North American lighting manufacturer GE Current for US$350 million.

This business includes multiple sub-brands, including rea Architectural Lighting, Beacon, Litecontrol, Kim, Columbia, Prescolite, Alera, Dual-Lite, Compass, Hubbell Outdoor Lighting, etc.

The home lighting business sold by Hubbell this time mainly sells indoor and outdoor lighting solutions, with sales expected to be approximately US$190 million (approximately RMB 1.355 billion) in 2023.

Regarding the sale of the home lighting business, Hubbell stated that this is to continue to implement the company’s development strategy, which is to create a key business portfolio with growth and profitability. Hubbell will strategically align itself with the megatrends of grid modernization and electrification. Hubbell said the company has a leading position in energy infrastructure and will continue to serve utility and electrical customers both in front of and behind the meter.

From a performance perspective, the electrical and utility business is Hubbell's main source of revenue. Hubbell will achieve revenue of US$4.9 billion in 2022, an increase of 16.67% from US$4.2 billion in 2021, including US$2.9 billion in utility revenue and US$2 billion in electrical business revenue. The improvement in performance has made Hubbell firm in its corporate strategy of developing power grid, electrical and other related businesses.

On the same day as the announcement of the sale of the home lighting business, Hubbell also announced the completion of the acquisition of Northern Star Holdings, Inc., a business owner Operating substation control and relay panel products, as well as providing substation general contracting solutions, can ensure the reliable operation of the power grid. This acquisition also once again demonstrates Hubbell's future development focus.