GLG hires Ankura Consulting to explore sale of Pierlite subsidiary
Gerard Lighting Group has hired financial advisors to help explore strategic options for its Pierlite subsidiary, with a sale the most likely outcome.
The move comes seven months after Gerard Lighting Group sold two of its other divisions to Schréder: Sylvania, which delivers lighting solutions to roadways, tunnels and sporting facilities; and Austube, a light manufacturer. Schréder is a Belgian family-owned company that has 2,600 employees and operates in 35 countries around the world.
The Australian group is now – as reported by the AFR – preparing to offload Pierlite. Its flagship brand, Pierlite designs, manufactures and distributes indoor architectural, industrial and commercial lighting systems. Ankura Consulting, a US headquartered consulting firm, has been appointed as the company’s financial adviser, with Sydney-based managing director Preeti Inchody (ex-FTI Consulting) heading the task.
Not too long ago, Gerard Lighting Group was Australia’s biggest lighting company. The company was listed on the ASX for a short stint before CPE Capital bought it in 2012, via a $186 million takeover. The business however struggled in a competitive market with shrinking margins, in particular due to the rise of low-cost Chinese manufacturers.
Gerard Lighting Group built significant debt in the years between 2012 and 2017, before it was bought by Investec and Bain Capital in June 2017. The two private equity firms kicked off with a comprehensive turnaround program, and later on steered the company through several large transformations, focused on enhancing internal operations, the technology infrastructure, innovation, and shifting the distribution model to a customer-led approach.
The transformation paid dividends – Investec and Bain Capital are understood to have recouped their investment. Pierlite currently generates around $150 million in annual revenue, and profits in the tens of millions. According to Gerard Lighting Group’s chairman Ben Sebel, the subsidiary is well positioned to tap into the opportunities unfolding in the market.
“The business has a clear strategy to capitalise on the significant opportunities in important and rapidly emerging segments, including the global market for smart building lighting solutions which is forecast to become a $US 100 billion industry by 2025.”
