September 3, 2024
Kichler Lighting Sold to Private Equity Firm for $125 million
Kichler follows Progress Lighting to Kingswood: Two key residential brands in one portfolio
Kingswood Capital Management, the Los Angeles-based private equity firm, has entered into an agreement to acquire Kichler Lighting from Masco Corporation for approximately $125 million. This acquisition marks Kingswood's second major foray into the residential lighting market, following its purchase of Progress Lighting from Hubbell Incorporated earlier this year.
Kichler Lighting, headquartered in Solon, Ohio, is a provider of decorative residential and light commercial lighting products. The company operates across both consumer and professional distribution channels, offering a broad range of products, including ceiling fans and LED lighting systems.
Masco will have owned Kichler for about six and a half years. In March 2018, Masco completed the acquisition of Kichler for approximately $550 million. At the time, it was reported that Kichler Lighting had revenues of about $450 million in 2017 and employed approximately 700 people worldwide. The recent sale of the lighting brand for $125 million might not have been the exit they envisioned.
Masco Corporation, which owns over 30 home improvement and building product brands such as Behr® paints and Delta® faucets, sees the divestiture as a strategic move to focus on its core business areas. The deal is expected to close before the end of the year, subject to customary closing conditions and regulatory approvals.
Kichler to be a sister brand of Progress Lighting
Kingswood's acquisition of Kichler follows its early 2024 purchase of Progress Lighting from Hubbell Incorporated. Progress Lighting, known for its residential lighting solutions, was acquired for $131 million in an all-cash transaction. The deal was part of Hubbell's broader strategy to streamline its operations and focus on its core electrical business.
Progress Lighting, with projected sales of approximately $190 million in 2023, has been a significant player in the residential lighting market. This acquisition solidifies Kingswood's position in the industry, bringing together two well-established lighting brands under its ownership.
Financial Implications and Potential Future Developments
The financial details surrounding these acquisitions highlight Kingswood's growing interest in the residential lighting sector. The combined purchase price of approximately $256 million for Kichler and Progress Lighting represents a substantial investment in the market. With both brands now under the same private equity umbrella, it’s possible that Kingswood may consider packaging the two companies for a future sale, potentially yielding a higher return on investment.
This consolidation also raises questions about the future direction of Kingswood's portfolio. Currently, Kingswood's holdings span various industries, including retail, outdoor equipment, and contact center solutions. Notable companies in its portfolio include World Market and The Save Mart Companies which is known to consumers as Perfumania. The addition of two significant residential lighting brands positions Kingswood as a key player in the home and lifestyle market, potentially paving the way for further acquisitions or strategic partnerships.
Masco's Strategic Shift
For Masco Corporation, the sale of Kichler Lighting aligns with its strategy to focus on its more lucrative home improvement and building products businesses. Masco's extensive portfolio includes over 30 brands, with household names such as Behr® paints and Delta® faucets leading its product lineup. The company reported revenues of $4.9 billion in 2022, reflecting its strong position in the market. By divesting Kichler, Masco aims to streamline its operations and allocate resources more efficiently toward its core business areas.
The potential for future consolidation or sale of these assets could further impact lighting markets, as private equity firms continue to play an important role in shaping the landscape of residential lighting.
