Facilitating Growth Through Acquisition
Luminaires is a leading North American manufacturer of specification-grade and architectural lighting fixtures. Luminaires designs, develops, manufactures, and distributes lighting products across North America via five niche divisions, each with its own focus. Luminaires serves commercial, institutional, hospitality, and municipal end markets and offers a wide range of contemporary lighting fixtures for interior and exterior use. Luminaires has received many industry awards for its innovative lighting designs and product excellence, including several prestigious Reddot Awards.
Background
Luminaires was established in 2010 when the shareholders of Eureka Lighting, a predecessor company founded in 1987, acquired majority stakes in two lighting companies, A-Light and Cyclone. The three companies were left unconsolidated and led by their respective management teams. In 2015, Luminaires decided to find a financial partner who could facilitate the retirement and estate planning objectives of Eureka’s two founding shareholders no longer active in the business and help management expand the business. Management and Luminaires’ shareholders chose Sentinel because of our experience with branded manufacturing businesses and proven record of growing businesses through acquisitions, as well as the strong chemistry and fit with the Luminaires team.
Opportunity
- To acquire a leading branded manufacturing business that could serve as a platform to further consolidate the highly fragmented lighting industry
- To partner with Luminaires’ talented and experienced management team, who coinvested meaningfully alongside Sentinel and continued to manage the business
Accomplishments
Created Consolidated Platform: Sentinel consolidated the three acquired companies into a legal entity with unified ownership and helped define a cohesive strategy across the businesses. These initiatives enabled Luminaires to streamline its reporting, combine purchasing efforts, and simplify decision making to execute a cohesive business plan.
Growth Through Acquisition: During our ownership, Luminaires successfully expanded the business by diversifying its product mix and end markets.
- In 2016, Luminaires acquired Luminis, a leading provider of contemporary outdoor and indoor commercial lighting fixtures. Luminis complemented Luminaires’ product portfolio and expanded its addressable market. Luminis’ sales growth accelerated after the acquisition, driven by implementing Luminaires’ best practices and leveraging its extensive sales network.
- In 2018, Luminaires acquired Luminaire LED, a leading provider of vandal-resistant light fixtures. Luminaire LED brought to Luminaires a new product category and revenues in different end markets, which significantly increased the scale of Luminaires’ operations.
Outcome
After a little more than three years, Sentinel and management integrated the original three companies and the two new acquisitions, and achieved the investment objectives we established at the outset. In 2019, Sentinel sold Luminaires to strategic buyer Acuity Brands (NYSE:AYI) in a highly successful transaction for Sentinel and its management partners.
Case studies have been selected for illustrative purposes for management teams of midmarket companies considering a partnership with Sentinel and should not be considered an offer or solicitation of services or an actual or implied endorsement of Sentinel or any security, investment, or portfolio company. The portfolio companies highlighted are not representative of all current and prior investments of Sentinel. A list and description of investments since Sentinel’s inception is available on this website.