The company is also realigning its manufacturing operations and shifting production to a contract manufacturer, Jabil. LSG will close its facility in Monterrey, Mexico.
LSG says that the funding will be used to finance growth and “enhance LSG’s leadership position in the LED lighting market.” There will be a strong focus on “continued development of the company's technology and product pipeline, as well as significantly and rapidly-improving operational efficiencies.”
LSG also says the financing “is expected to be sufficient to finance LSG’s strategy to achieve profitability.” The latest funding tranche was provided by Zouk Capital LLP, Europe's largest dedicated growth equity fund in the cleantech space, and a sovereign wealth fund from the Middle East. They join Riverwood Capital, a globally-focused private equity firm that invests in high-growth businesses in the technology and services industries, and Pegasus Capital Advisors, LP, the company's majority shareholder, previous participants in the equity financing.
LSG realigns manufacturing operations
In related news, LSG is realigning its manufacturing operations. It says the move will allow it to capitalize on increasing market demand for its LED lighting products, while positioning the company for long-term growth and profitability.
In an effort to respond quickly to growing customer demand, LSG is also expanding its relationship with electronics manufacturer Jabil Circuit (NYSE: JBL). This is intended to provide LSG with greater scale, global production capabilities, a stronger supply chain and faster speed to market for its new products.
Between now and the end of 2012, LSG will be transitioning its manufacturing production in Monterrey, Mexico, to Jabil, also in Mexico. The transition is planned to ensure uninterrupted delivery of products to the market. Once the transition is complete – and this is likely to be by July 2013 – production will cease at the Monterrey facility.
The transition is likely to involve the termination of employment of approximately 520 employees, and will cost LSG in the region of $6 million.
Additionally, LSG is increasing its investment in its Satellite Beach manufacturing facility, where it will focus primarily on the production of large-scale, custom lighting products, as well as its infrastructure and roadway product lines.