Bloomberg News

Toshiba Buys Chip-Production Assets From LED Startup Bridgelux

April 22, 2013

Toshiba Corp. (6502), the Japanese maker of flash-memory chips, elevators and nuclear reactors, is buying the chip-production assets of Bridgelux Inc., a producer of energy-sipping light-emitting diodes.

The deal expands a licensing and manufacturing partnership the companies signed last year, Toshiba and Bridgelux said yesterday in a statement. Financial terms weren’t disclosed.

Bridgelux is getting out of the chipmaking business, where costs are prohibitive for a startup, to focus on research and development and marketing of LED products designed for industries seeking to adopt more efficient lighting systems. The company is on pace to record more than $100 million in sales this year and won’t lose revenue by divesting the production unit, Chief Executive Officer Bradley Bullington said.

“This is a very attractive deal for us,” Bullington, 39, said in an interview. “It gives us a tremendous amount of freedom to invest in hardcore R&D, build out our channel and brand and not need to raise more money.”

Venture capital and private equity investors last year provided $2.2 billion to companies developing so-called smart energy technologies, including energy storage, LEDs and other efficiency products for consumers and the power grid, according to data compiled by Bloomberg. That accounted for 38 percent of venture capital and private equity funding in all clean energy technologies, up from 15 percent in 2008, the data from Bloomberg New Energy Finance shows.

$250 Million Funding

Bridgelux, founded in 2002, has raised about $250 million in private financing from investors including DCM, VantagePoint Capital Partners, El Dorado Ventures LP, and Kaistar Lighting Xiamen Co., a joint venture of two Chinese manufacturers. Toshiba invested in Livermore, California-based Bridgelux last year, part of an agreement to jointly develop LED chips to meet growing demand for liquid-crystal displays and lighting systems.

As part of today’s deal, 40 of Bridgelux’s employees, or 15 percent of its total workforce, will join Toshiba, though they will stay at Bridgelux’s plant in Livermore, said Bullington, who became CEO in February. Toshiba, based in Tokyo, can use the acquired technology in products like LCD panels, which Bridgelux doesn’t sell.

The transaction “will position both companies for strong growth in our respective LED businesses,” Toshiba Vice President Makoto Hideshima said in the statement.

Bridgelux’s sales are split evenly across the U.S., Europe and Asia, and the company’s products are commonly used for street lights, manufacturing plants and department stores, Bullington said. Customers include Zumtobel AG and Cooper Industries Plc, a unit of Eaton Corp. (ETN:US), he said.

Bullington, like his predecessor Bill Watkins, joined Bridgelux in 2010 after working at disk-drive maker Seagate Technology Plc (STX:US), where Watkins was CEO.

To contact the reporters on this story: Ari Levy in San Francisco at alevy5@bloomberg.net; Andrew Herndon in San Francisco at aherndon2@bloomberg.net

To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net; Reed Landberg at landberg@bloomberg.net


Cash Is for Losers
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • ETN
    (Eaton Corp PLC)
    • $68.91 USD
    • 0.52
    • 0.75%
  • STX
    (Seagate Technology PLC)
    • $66.23 USD
    • 1.29
    • 1.95%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus