Insight

Lighting M&A newsletter Q2 2020

Lighting trends update Q2 2020

Shez Bandukwala

Shez Bandukwala

Managing Director, KPMG Corporate Finance LLC

+1 312-665-1067

Industry trends and M&A Landscape

  • After a robust M&A landscape over the last few years, we expect a temporary, but significant slow-down in lighting M&A over the next 6-12 months, concurrent with lack of visibility of revenue growth, more specifically influenced by uncertainty in new construction and commercial spending.
  • Legrand’s acquisition of Focal Point in February 2020 solidifies its position as a dominant player in specification grade lighting. With past acquisitions of Pinnacle, Finelite and Kenall, as well its initial acquisition of Wattstopper, Legrand now has an estimated $1B in North American lighting revenue.
  • From a Private Equity perspective, over the last 5 years, many firms have interest in the sector with a number of new platforms that have been funded. The two largest PE-backed lighting platforms are GE Current and Visual Comfort, backed by American Industrial Partners and AEA, respectively.
  • Additionally funds such as CapStreet, Core Industrial Partners, Harbour Group, Inverness, KLH, Onward, Pfingsten, Riverside, Stone Arch and others have been active in the sector with platform investments.
  • Upon return to “normal” economic conditions, we expect a return to increased levels of transaction activity benefitting from a much broader set of acquirers outside of the traditional lighting conglomerates.
  • Shorter product lifecycles, LED product design flexibility, end-market focused solutions, controls, evolving channels to market are all contributing to more interest in M&A. We expect a further delineation between “winners” and “losers” over the next 24-36 months.
  • Depending on the timing of the market opening up, we also expect the departure of certain players in the crowded commercial lighting space that don’t have the financial wherewithal to withstand the economic slowdown.
  • Potential emerging trends impacting differentiation: UV, Power over Ethernet (POE), Circadian lighting, wireless controls


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KPMG Corporate Finance LLC’s investment bankers have extensive Industrial Markets transaction and industry experience, which enables them to understand the industry- specific issues and challenges facing our clients.