SAN FRANCISCO - Royal Philips Electronics NV, the world’s biggest maker of light bulbs, agreed to buy lighting-fixtures manufacturer Genlyte Group Inc. for $2.7 billion, its largest purchase ever. Philips will pay $95.50 a share in cash, it said yesterday. The bid is 52 percent more than Louisville, Ky.-based Genlyte’s closing price of $62.67 on Friday. The deal will make Philips the biggest lighting company in North America.

Chief executive Gerard Kleisterlee is using proceeds from selling semiconductor holdings to bolster the medical and lighting divisions and return cash to shareholders. Genlyte will help the Amsterdam-based company boost sales of systems using high-power light-emitting diodes, or LEDs. “The big advantage is that this business is actually making money,” said Eric de Graaf, an Amsterdam-based analyst at Petercam who recommends investors “hold” Philips shares.

“This fits the strategy and is a completely logical acquisition if you look at cash available.” Jayson Otke, a Philips spokesman, said the purchase is the company’s largest ever in dollar terms. Philips shares fell 0.3 percent in Amsterdam. Genlyte shares rocketed $31.80, or 50.7 percent, to $94.47 in New York trading. Cree Inc. , the maker of semiconductors that light dashboards and mobile phones, climbed $3.21, or 15.2 percent, to $24.29 in New York.

The offer values Genlyte at 10.6 times 2008 estimated earnings before interest, tax, and amortization, said Marcel Achterberg, an Amsterdam-based analyst at ING Wholesale Banking. Achterberg values Philips’s entire lighting unit at 12 times 2008 estimated profit. Genlyte, whose systems are used to illuminate office buildings, shops, streets, factories, and gas stations, had sales of about $1.6 billion in the 12 months ended in September.

This entry was posted on Tuesday, November 27th, 2007 at 7:02 pm and is filed under Consumer Electronics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.