Acquisitions: Osram ups its stake in Encelium Technologies, Acuity buys Pathway

Oct. 6, 2011
Acuity Brands has acquired Pathway Connectivity, a specialist in lighting networks and control, while Osram Sylvania increased its prior investment in software company Encelium Technologies.

Osram Sylvania has now fully acquired Encelium Technologies from investment firm Townsend Ventures adding Encelium's lighting-control and energy-management systems and software to the Sylvania portfolio. Acuity has acquired Alberta, Canada-based Pathway Connectivity, adding to its growing stable of adaptive-control technologies for LED-based solid-state lighting (SSL).

Acuity and Pathway

Pathway is focused on control electronics and systems for applications in architectural and entertainment lighting where SSL is becoming a force. The company has delivered systems that produced dynamic visual experiences for applications ranging from theatre and concerts to buildings and other architecture features.

"The Pathway team brings advanced networking products and engineering capabilities to Acuity Brands that fits into our strategy of expanding the opportunities associated with integrating lighting and controls solutions, " said Vernon Nagel, chairman, president, and CEO of Acuity Brands.

"For over 25 years, we have stretched the realm of the possible, integrating disparate lighting and controls systems for demanding theatrical and architainment customers," said Dave Higgins, Pathway founder, president, and CEO. Indeed Pathway's strengths lie in networking control systems, intelligent lighting systems, and driver electronics, even when the products use disparate communication protocols.

Higgins added, "We are excited to join an industry leader and begin integrating our skills and intellectual property in order to expand the market opportunity as part of Acuity Brands."

"The technology and products of Pathway enable lighting solutions that are rapidly encompassing sophisticated lighting networks," said Nagel. "We welcome this talented team to the Acuity Brands family."

The companies did not announce the terms of the acquisition. Acuity said that it doesn't expect the acquisition to materially impact future consolidated financial results. In a first public event post merger, Pathway's technologies will be in the Acuity Brands' booth at the entertainment-oriented LDI2011 lighting conference scheduled later this month in Orlando, FL.

Sylvania and Encelium

Teaneck, NJ-based Encelium Technologies, meanwhile, will now become part of Osram General Lighting – LMS (Light Management Systems) organization. Osram had previously acquired a 15% stake in Encelium and will now assume full ownership. Osram believes the acquisition will extend what is already an established position with Sylvania in the energy-efficiency business. Ultimately, Osram sees the acquisition as another avenue that can help grow its LED business.

"Today lighting is responsible for 20 percent of electrical energy consumption globally. In the US it accounts for more than 30 percent of the commercial building’s electrical energy consumption," said Klaus-Günter Vennemann, CEO of general lighting at Osram. "With an ever-increasing demand for improved energy efficiency of commercial buildings, this acquisition enables us to offer smart LMS options to our customers worldwide that provide the right light, in the right amount, at the right place, at the right time."

Indeed many prognosticators see LMS as a key growth engine. Osram pointed out the recent McKinsey study that estimates the market for lighting systems control components at EUR2 billion. Moreover, McKinsey expects that market to double by 2016 and triple by 2020. The draw in controls is the fact that efficient technologies such as SSL combined with LMS cam yield 80% energy savings.

"Osram leadership in LED lighting solutions, from modules, luminaires and controls, to installation and maintenance services, coupled with Encelium’s software technology capabilities, supports an aggressive growth strategy and further penetration into both existing and new markets," said Anthony Marano, CEO of Encelium. Osram's Vennemann added, "The acquisition of Encelium, and its cutting-edge lighting control software for commercial buildings, is the next logical step for Osram in becoming one of the leading LED lighting solutions providers."