Photographer: Jasper Juinen/Bloomberg

Philips to Raise as Much as $1.1 Billion From Lighting IPO

  • Philips to sell stock at 18.50 euros to 22.50 euros a share
  • Sale to value whole lighting unit at as much as $3.8 billion

Royal Philips NV is seeking to raise as much as 970 million euros ($1.1 billion) from the initial public offering of a 25 percent stake in its lighting unit in Amsterdam after a private sale process didn’t result in a deal.

Philips is planning to sell 37.5 million shares at a range of between 18.50 euros and 22.50 euros per share, the Amsterdam-based company said in a statement on Monday. That values the lighting business at as much as 3.38 billion euros. The shares are expected to start trading on May 27, the company said.

Separating the lighting business, which dates back to 1891 when Frederik Philips and his son started selling incandescent lamps, will allow the company to concentrate on the global health-care market with equipment including scanners and consumer goods such as shavers and toothbrushes.

“The process is well on track,” Philips Chief Executive Officer Frans van Houten said in the statement. “I am convinced that as separately listed companies, Royal Philips and Philips Lighting will be even better equipped to focus on innovation, entrepreneurship and long-term value-creating growth opportunities.”

Philips shares traded 0.6 percent higher at 22.35 euros as of 12:22 p.m. in Amsterdam, valuing the company at 20.8 billion euros. The stock has fallen 5.2 percent this year, and traded for the first time without rights to receive the latest dividend on Monday.

IPO Trio

Philips is one of three Dutch companies to be proceeding with IPO plans this year, alongside insurer ASR Nederland NV and infrastructure developer SIF Holding NV. Dutch companies raised almost $8 billion from IPOs last year, with more than half coming from ABN Amro’s listing, according to data compiled by Bloomberg.

Philips has attracted interest in the division from companies including Blackstone and Onex Corp., a group led by Apollo, as well as Chinese investor GO Scale Capital, according to people familiar with the matter, who asked not to be named because the process was not public.

On the basis of the offer price range, Philips will raise as much as 844 million euros from the IPO, rising to 970 million euros assuming full exercise of an over allotment option.

The lighting division reported adjusted earnings before interest taxes and amortization of 547 million euros in 2015 and had 7.47 billion euros in sales.

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