Auto supplier and ower management giant Eaton Corp. plc plans to spin off its lighting business into an independent, publicly traded company and sell off its Automotive Fluid Conveyance business by the end of 2019.
The business, which makes LED lighting and controls, has annual sales of about $1.7 billion. Eaton said in an announcement that it hopes to complete the spinoff by the end of 2019.
Also on March 1, the company held its annual investors conference, and presentation materials posted on Eaton's website add a little more insight into what the company's doing.
The spinoff will have a legal headquarters in Ireland, just as Eaton Corp., although the company's North American headquarters is in Beachwood, Ohio.
The lighting business would have U.S. offices in Atlanta, and it would boast about 5,000 employees worldwide, Eaton said in the material for investors. It describes the business as "a leading global provider of LED lighting solutions" with "an extensive product portfolio" and a "differentiated sales network with market-leading relationships." Growth in the lighting unit is "driven by increases in connected and intelligent solutions, along with growing complexity and technical requirements."
Along with the spinoff, Eaton told investors that it plans to sell its Automotive Fluid Conveyance business by the end of 2019. That business, part of Eaton's Vehicle Group, has about $150 million in annual sales, and includes plastics and rubber for hoses and other parts. Similar to the rationale for the lighting spinoff, Chief Financial Officer Richard Fearon noted that "remaining vehicle business [is] expected to be higher growth" and that the vehicle segment margin is "expected to increase by about 100 bps."
Goldman Sachs is serving as the company's financial adviser on the lighting unit spinoff. Eaton employs 99,000 people worldwide and sells products to customers in more than 175 countries. Its sales last year were nearly $22 billion.
