July 26, 2024
Dialight Sells Signal Business to Leotek in "Non-Core Disposal"
Net proceeds of $5.5 million will be used to reduce Dialight's indebtedness
Dialight, a UK-based company best known for manufacturing LED lighting products for industrial and hazardous environment applications, has announced the sale of its North American signal lights business to Leotek Electronics USA. The transaction, valued at $5.8 million gross, is described by Dialight as a "non-core disposal." This move enables Dialight to streamline its operations and focus on its primary business segments.
The sale includes Dialight's traffic, pedestrian, and railroad signal lights division, which has been identified as non-core to the company's main business operations. The transaction is set to bring in net cash proceeds of $5.5 million after accounting for transaction costs. These proceeds will be utilized to reduce Dialight's overall group indebtedness.
Despite the sale, Dialight will continue to manufacture signal products under license for Leotek for up to 15 months following the completion date. This transitional period aims to ensure a smooth transfer of operations and continuity for customers.
How this impacts Dialight & Leotek
Interestingly, Dialight’s announcement stated “The gross value of assets sold is $nil and profits attributable to the Business in the twelve-month period to 31 December 2023 of $nil.”
Dialight generated approximately $190 million in revenue in 2023. Steve Blair, CEO of Dialight, stated, "This disposal allows us to focus our resources and management efforts on our core industrial LED lighting business, where we see significant growth opportunities."
Leotek, based in California, specializes in street and area lighting, as well as traffic signal solutions. The company claims "LEOTEK LED traffic signal modules are installed in over 30% of America’s intersections including over 6,000,000 modules installed in North America and Over 14,000,000 traffic signals worldwide."
The acquisition of Dialight's signal business is may further bolster Leotek's existing product portfolio and expand its market offering in North America.
