Genlyte Group, Inc., and Thomas Industries, Inc., agreed to form a joint venture that would create the third-largest lighting-fixture company in the U.S., with an estimated 13% share of the market.
The joint-venture company, which has yet to be named, would bring together some of the strongest specification product lines in the lighting fixture business. Genlyte, Union, N.J., would contribute substantially all of its assets to the joint venture and would own 68% of the business. Thomas Industries, Louisville, Ky., would put its entire lighting operations into the new company and would hold a 32% stake. Further terms of the deal were not disclosed. The new company is expected to have 1999 sales of more than $900 million.
Genlyte and Thomas Industries would each continue as separate companies after the transaction is completed, which is expected in the third quarter.
Larry Powers, president and chief executive officer of Genlyte, would hold the same posts in the joint venture, while Timothy Brown, chairman, chief executive officer and president of Thomas Industries, would be chairman of the venture. Richard Crossland, currently corporate vice president of Thomas, would be executive vice president and chief operating officer.
The companies said the combination would have the size, distribution network and manufacturing efficiency needed to better compete with larger fixture manufacturers. "I think there are a lot of disadvantages that we have been operating under separately that will go away," said Brown. "We'll certainly have more purchasing leverage. I think we'll be able to better leverage our facilities as well."
Cost savings in purchasing will be especially strong, said Powers. "We believe we will be in a much stronger position to buy larger quantities of steel, ballasts, lamps, sockets, those kinds of commodities that will strengthen both of the companies, and lower our costs."
The joint venture would maintain existing brands for both companies, including Genlyte's Bronzelite, Crescent and Lightolier. Thomas brands include Day-Brite, Capri and Matrix. Genlyte and Thomas brands would continue to be sold through their separate sales organizations. Powers and Brown said that in general Thomas and Genlyte would not have access to each other's products, although there may be some instances that require filling a hole in each other's product lines.