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The world’s largest general lighting company will debut on public markets soon as parent company Royal Philips, based in Amsterdam, the Netherlands, announced its intention to launch an initial public offering and listing on the Euronext Amsterdam stock exchange of at least 25% of Philips Lighting.
Analysts estimate the value of the business at about €5 billion ($5.8 billion), according to Reuters. Philips reports that for the year ended Dec. 31, 2015, Philips Lighting generated €7.5 billion in sales and adjusted earnings (EBITDA) of €547 million. It will begin its run as a stand-alone company with €950 million (over $1 billion) in debt.
Philips in 2014 announced its intention to sell Philips Lighting or prepare it for an IPO in a shift of the parent company toward a heavy concentration on health and medical equipment technology products. The company since 2013 has been selling off its electronics and consumer goods businesses in line with that strategy. The move to divest from the lighting business is a significant one for Philips, which began as a lighting manufacturer in 1891.
The offering would consist of shares held by Royal Philips offered to institutional and retail investors in the Netherlands and certain other jurisdictions. After the IPO, Philips will retain a majority holding with the intent of selling the rest of its stake over the next several years.
Philips Lighting, headquartered in Eindhoven, will continue to use the Philips brand. Eric Rondolat, CEO, will continue to lead the company.
