Carlyle joins ranks of potential bidders for Germany’s Osram
Despite profit warnings, lighting technology group had also attracted interest from Bain
Carlyle, the US private equity firm, has joined a growing list of buyout houses considering a €4bn-plus takeover bid for Germany’s Osram, the lighting technology group that was spun out of industrial behemoth Siemens five years ago.
Carlyle’s interest was confirmed by two people with direct knowledge of the situation, who cautioned that there was no certainty the company would follow through with a firm offer. One of these people said Carlyle was taking a “preliminary look” which was at an early stage.
Carlyle declined to comment.
Last month, shares in Osram soared on news that Bain Capital was sizing up a possible offer for the company, whose market value now sits at €3.7bn.
Osram has struggled this year, issuing two profit warnings that have dragged its share price down by more than half. From a peak of €79 in January, they traded as low as €30 last month.
The profit warnings were, to some extent, a broader reflection of woes in the auto sector, where Osram earns half of its revenue.
As car sales in China slow, new emissions standards hit carmakers’ production in Europe and the US threatens a broader trade war, a string of German auto suppliers have issued profit warnings this year, including Continental, Thyssenkrupp and Schaeffler.
Long-term, however, automotive is still expected to be a major driver of growth for Osram. Even if car sales drop from peak levels, its content-per-vehicle — the total of parts and components within a car — is expected to grow.
Osram makes LED headlamps, for instance, which are currently in about 20 per cent of all new cars sold, according to Karsten Iltgen, analyst at Bankhaus Lampe. “That will go to 80 per cent in five years at the earliest and 10 years at the latest,” he said.
Outside of automotive, Osram is increasing its presence in horticulture lighting to enable trends such as indoor vertical farming, in which vegetables are fed with water and artificial lighting to grow within big cities. In consumer electronics, Osram supplies smart watch makers including Apple with sensor components so that users can track their heartbeat.
“Osram is in transition,” said Mr Iltgen. “It used to be a boring lighting company. It’s becoming a cool tech company.”
Interest from Bain and Carlyle has made Osram the second high-profile potential leverage buyout in Germany, after the Financial Times revealed last week that private equity firms are also sizing up bids for Scout24, the online listings company.