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April 7, 2022   

ams OSRAM Confirms Traxon and Other Lighting Assets are for Sale

2022 04 osram confirms traxon clay paky for sale.jpg

Company expects a quick exit from three remaining lighting platforms

 

The ams OSRAM Capital Markets Day took place on Tuesday, April 5, 2022 in a virtual format. During the two hour and 37-minute presentation, Chief Business Development Officer, Mark Hamersma, explained that the company is seeking to spin-off non-strategic businesses to eliminate distractions and free up capital.

The non-strategic businesses are:

Digital Systems North America

Sold to Acuity Brands in 2021

Digital Lumens / Encelium

Sold to Skyview Capital in 2021

Fluence

Announced sale to Signify

Automotive Lighting Systems

Announced sale to Plastic Omnium

Traxon

For sale

Clay Paky

For sale

Digital Systems Eurasia

For sale

 

ams OSRAM is pursuing the divestiture of the segments in seven transactions due to the varying buyer landscape of each lighting platform. The company explained that while that creates more work, the strategy is expected to return much higher proceeds from the transactions.

The seven business platforms above have a combined annualized revenue run rate of approximately $1 billion. The company also noted that the combined business segments were losing money, "contributing negatively to the adjusted EBIT in 2021” which seems like another rather good reason to sell.  We believe that at least two of the above businesses are profitable, so the negative EBIT comment is an aggregate assessment.

The divestiture timing of Traxon, Clay Paky and Digital Systems Eurasia is expected to be the second half of 2022, yet no signing or agreement is in place at this point in time. Here are more details on the segments that ams OSRAM is seeking to sell.

Traxon: ecue
Traxon was described in the capital markets presentation as a maker of “city/building/street lighting systems” which doesn’t seem like the most accurate way to concisely describe the product line. The “About Us” section of the Traxon website more accurately describes the brand as providing lighting systems for architectural, entertainment, hospitality, and retail environments.

Clay Paky Entertainment
The pandemic has been a challenging time for companies whose products are sold into the live events market, but ams Osram-owned Clay Paky is a well-respected Italian theatrical lighting brand – that is reported to be stronger in Europe than in other parts of the world.

Digital Systems Eurasia
Acuity Brands’ 2021 acquisition specified that it was buying the North American DS business. ams Osram still owns Digital Systems product platforms that service the rest of the world.

The company expects to retain the lighting businesses related to Opto Semiconductors, aftermarket automotive lamps and lamps related to industry & entertainment.

 

 

 

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