Solidifying its position as the leading player in the highly fragmented $8.2 billion North American lighting equipment market, National Service Industries Inc., the parent of Lithonia Lighting, agreed to buy Holophane Corp. for about $450 million, or $38.50 a share.
If the agreement receives antitrust clearance from the federal government, the combination of Holophane and Lithonia Lighting's group of products would create the largest player in the industrial and outdoor lighting market. The addition of Holophane significantly expands Lithonia's international presence, which previously focused on North America for 99% of its sales. Holophane has more than $40 million in non-U.S. sales annually.
With annual revenues of more than $1.1 billion, Lithonia Lighting is already the largest lighting equipment manufacturer in North America. Holophane, with 1998 sales of $215 million, would operate as a separate business unit of Lithonia Lighting and would continue to go to market through its existing factory sales force, according to John Morgan, Lithonia's executive vice president, who will become general manager of Holophane. John DallePezze, Holophane's chairman, president and chief executive officer, will assist in the transition and continue with the company. Lithonia Lighting expects the Holophane management team to remain intact, according to a Lithonia Lighting spokesperson. Lithonia intends to keep Holophane's eight manufacturing plants and 2,000 employees.
National Service Industries said it will begin a cash tender offer for Holophane's outstanding common shares by June 25. The company said it will initially finance the deal, which is subject to antitrust clearance, with short-term debt.