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Cree Buys Ruud Lighting for $525 Million, Takes LEDs Outside

Cree Inc., a maker of energy-efficient lighting products that are used indoors, purchased Ruud Lighting Inc. for about $525 million in cash and stock to expand into the market for outdoor illumination.

Cree completed the acquisition today and expects Ruud’s results to be “slightly” dilutive to its fiscal 2012 net income, the Durham, North Carolina-based company said today in a statement. Ruud will continue to be based in Racine, Wisconsin, and operate as a subsidiary of Cree.

The combination will give Cree access to a larger market for light-emitting diodes, which many cities are starting to use for streetlights to save money in the $17.3 billion U.S. lighting industry.

“Ruud is a leader in bringing LEDs outdoors and will help us expand the market for all LED products and components,” Cree Chief Executive Officer Chuck Swoboda said in an interview.

Hendi Susanto, an analyst at Gabelli & Co. in Rye, New York, said the two companies are complementary. “Cree will be able to expand their product into the outdoor lighting market,” he said in an interview. Susanto has had a “hold” recommendation on Cree since Aug. 10.

Closely held Ruud’s results will be combined with Cree’s for the company’s fiscal first quarter ending in September. Revenue for the first quarter will be in the range of $265 million to $275 million, up from the company’s Aug. 9 guidance of $245 million to $255 million.

Cree sank $2.92, or 8.4 percent, to $31.82 as of 5:48 p.m. in late trading on the Nasdaq Stock Market. At the close of regular trading today, Cree had dropped 55 percent this year.

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