Published On: Sun, Aug 11th, 2019

KKR to acquire 70% stake in NVC Lighting’s Chinese lighting business

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KKR , through its Asian Fund III, has agreed to acquire a stake of 70% in NVC Lighting’s Chinese lighting business (NVC China) for a total equity value of around $794 million.

NVC Lighting will own the remaining 30% stake in the Chinese lighting company which manufactures, sells and distributes branded lighting products. NYC China also offers lighting solutions to consumers and business clients through its distribution network across the country.

Paul Yang – Member and Head of KKR Greater China, said: “China’s lighting market has experienced tremendous momentum over the past 20 years and continues to develop as technology advances and next generation products come online. NVC China is an industry leader with an extensive distribution network, well-known brand name and strong product design capabilities.

“We look forward to working together with NVC China’s talented management team to support their long-term growth plan, as well as contributing to the overall development of China’s lighting industry and deepening KKR’s commitment to the market.”

KKR to acquire 70% stake in NVC Lighting's Chinese lighting business

KKR to buy 70% stake in NVC Lighting’s Chinese lighting business. Image courtesy of KKR.

The subsequently formed joint venture for NVC China will be supported by KKR’s resources and operational expertise which is expected to help the Chinese lighting business to carry out a long-term growth strategy. This is expected to be backed by the ongoing consumption, industrial and commercial upgrades in China along with the promotion of energy conservation and environmental protection.

According to the parties involved in the deal, the trends underpin healthy long-term sector growth for the lighting industry in the country with NVC China to invest in its business to make sure that the NVC brand remains ahead as a technology and business model innovator.

Upon completion of the transaction, NVC Lighting will be engaged mainly in its non-lighting business in China, China ODM business and global business, which includes the design, development, production, marketing, and sales of lighting products.

Wang Donglei – Chairman of the Board of NVC Lighting, said: “Our Board conducted a comprehensive sales process, assisted by financial and legal advisors. We are pleased that this robust process has produced an outstanding outcome for our shareholders, who will maintain minority ownership in NVC China as well as full ownership of NVC Lighting’s international business and its non-lighting business in China, and receive a compelling cash consideration for their shares.

“We believe we have found a partner in KKR who shares our conviction in the opportunity for NVC China and will contribute resources and operational expertise to support the long-term development of the business.”

For KKR – Paul, Weiss, Rifkind, Wharton & Garrison, Fangda Partners and Kirkland & Ellis are the legal advisors. On the other hand, Freshfields Bruckhaus Deringer served as legal advisor and Deloitte & Touche Corporate Finance is the financial advisor to NVC Lighting.

Subject to customary closing conditions and receipt of regulatory and shareholder approvals, the deal is expected to be wrapped up in Q4 2019.

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