OLEDWorks will acquire ownership of Philips Lighting's OLED technology platform and manufacturing facility, although the deal will result in a new legal entity and continued use of the Philips brand name.
OLEDWorks LLC has announced a complex business agreement with Royal Philips that will chart the future course for the OLED sector of the Philips Lighting business. Philips will establish a new legal entity to which OLED intellectual property (IP) and the Philips Aachen, Germany OLED manufacturing facility will be transferred, and OLEDWorks will acquire all shares in the new entity. OLEDWorks will also gain a license to use the Philips brand in selling OLED panels from the entity and Philips Lighting will continue to distribute the OLED panels that result from the venture.
The OLED deal marks the last step in moves by Royal Philips to separate the LED and lighting businesses into separate operating companies. Less than a month ago, the company announced the sale of the Lumileds LED business to Go Scale Capital. Later last month, Philips said the Philips Lighting entity would be partially divested in an IPO during 2016, although Royal Philips will retain a majority stake in the lighting business in the near term.
The fate of the OLED unit that has operated as part of Philips Lighting was addressed back in February 2015 when executives for the OLED unit said it would be sold separately from Philips Lighting. At the time, the Philips OLED group said it was seeking a partner that had a vested interest in OLED technology for the long term for use in general lighting. And OLEDWorks certainly fits that description.
"In pursuance of our strategic focus we have decided to divest our OLED components development and production to a specialized partner," said Eric Rondolat, CEO of Philips Lighting. "This will enable us to focus our business and resources on developing innovative connected lighting systems and services for professional and consumer markets."
OLEDWorks, meanwhile, will get a production facility that Philips has invested in significantly. In a feature article on OLEDs in 2013, Philips stated that it had invested EUR 40 million (about $50.5 million at the time) in the Aachen manufacturing facility. Philips and OLEDWorks have not identified the financial terms of the deal or the chronology of when the new entity will be established. OLEDWorks claims to be the leader in US-based manufacturing of OLED panels and has received significant R&D grants from the US Department of Energy for further development.
"The team in Aachen brings OLED expertise in production of quality high-brightness panels that complements the OLED heritage and manufacturing innovation of our Rochester team," said David DeJoy, CEO of OLEDWorks. "With our new expanded team, OLEDWorks will continue to introduce exciting and novel OLED lighting modules that enable, and inspire, innovative luminaire designs. Existing customers will realize continued reliability in performance, delivery, and collaboration; new customers can develop differentiated final products with the same support."
Meanwhile, Philips Lighting will retain the luxury of tapping the OLEDWorks supply for future lighting products as the maturity of the technology allows and applications emerge. "Philips sees the merit of OLED as a light source for specific applications in its systems and services portfolio and will continue to apply OLEDWorks’ panels in its finished products," said Rondolat. "We are very pleased that with OLEDWorks we have a strong and solid partner to take OLED lighting panel production to the next level."
Likewise for OLEDWorks, the company will enjoy a somewhat captive customer to supply along with its existing business. "The acquisition of strategic elements of Philips OLED lighting technology, manufacturing, and OEM sales channels significantly broadens our mission to deliver high-performance OLED light engines to a wide range of lighting applications," said DeJoy.
New Philips OLEDs
Ironically, on the same day that the news of the acquisition hit, the Philips OLED group also announced plans for some new panels. The Lumiblade Brite FL300L panel (shown at right) measures roughly 10×3.5 in, and outputs 300 lm at an efficacy of 50 lm/W. The panel comes in a 3000K CCT with a CRI of 80. The panels will be on display at LightFair International next week and the company hopes to commence merchant supply in the 3rd calendar quarter of the year.