Jes Munk Hansen takes over as CEO of Osram US and head of global Osram sales, while an automotive OEM joins Osram in an automotive lighting joint venture, and Adesto acquires smart-SSL specialists Echelon.
Osram has announced the appointment of Jes Munk Hansen into dual executive roles as CEO of Osram’s US business and head of global sales across all Osram business units. Osram has also announced a partnership with Continental to form the Osram Continental GmbH joint venture focused on automotive lighting and using LEDs in unique ways internal and external to the passenger cabin. Adesto Technologies and Echelon, meanwhile, have jointly announced that Adesto will acquire Echelon for $8.50 per share, well above where Echelon stock has been trading as the company has tried to establish its industrial Internet of Things (IoT) technology into the solid-state lighting (SSL) sector.
The Jes Munk Hansen news at Osram is essentially a return engagement for the executive, who will succeed Grant Wright in the CEO US role. And Hansen will assume the new role of working with the heads of business units globally to manage sales functions with a mandate of driving growth.
Hansen had previously joined Osram in the fall of 2013 as CEO of Osram Americas and president and CEO of Osram Sylvania. Nine months into his first stint with Osram, Hansen penned a column for LEDs Magazine that discussed the opportunities in smart lighting along with other trends the newcomer to the SSL space had noted at LightFair International 2014.
Of course, subsequently there would be major changes at Osram as the company sought to carve out its legacy lamps business to focus on applications and technologies with greater growth potential. That separation of the lamps business was completed in July 2016, and Hansen assumed the role of CEO of the business that would come to be known as LEDvance. Osram ultimately sold LEDvance to a trio of partners from China and now the company is fully owned by MLS. Early in 2018, Hansen left his position at LEDvance and Jacob Tarn is now at the helm as CEO.
Osram, meanwhile, has begun to look more like a company focused on supplying enabling technology and software platforms to SSL manufacturers than like a lighting manufacturer itself. We noted that trend after Light+Building (L+B) in March where the company announced the Lightelligence platform.
The trend toward smart lighting and other emerging applications at Osram is likely a good match with Hansen. Even though he did not originally come to Osram from a high-tech past, he had immediately impressed with a strategic vision about SSL product development and using standardized building blocks to economically enable the development of many products in parallel. There are such principles behind Lightelligence.
Osram Continental GmbH
Moving to the next item on our LED business news list, Osram also made news on the corporate front with the announcement of the auto-focused joint venture with established auto-industry OEM Continental. The organization will initially be based in Munich, Germany and employ 1500, although the plan is to establish a new corporate headquarters in Garching, Germany within the next year.
We write quite a lot about smart lighting and the Internet of Things (IoT) and, interestingly, the new venture strikes many of the same smart SSL themes yet related to vehicles. We have regularly discussed adaptive beam headlamps that are dynamically controlled based on weather, other traffic, and geography. Osram has been a leader in that space and the new venture will continue such developments.
But the smart concept will include far more novel concepts. For example, Osram said that based on a car’s navigation systems and sensors, a smart SSL system might even project messages outside the vehicle for other road users.
“By launching our joint venture, we are generating confidence that the market for intelligent automotive lighting will continue to grow and be viable,” said Harald Renner, CFO and member of the general management of Osram Continental GmbH. “Furthermore, with our team of experts from both companies, we will increase the efficiency, innovation, and integration of our products. I am looking forward to collaborating with our new colleagues to develop exciting, game-changing products.”
The companies indeed have very optimistic goals for the joint venture. The partners said to expect annual sales in “the mid-triple-digit-million-Euro range.” The partners each hold a 50% stake in the venture and believe it will generate double-digit growth annually over the next five years with the first products ready for volume production in 2021.
Adesto and Echelon
Moving to the acquisition, Echelon had clearly been looking for an investor or buyer for some time — chairman and CEO Ron Sege presented at the Strategies in Light Investor Forum — although the company is far from a startup. It has a long history supporting connectivity and industrial automation and offers both semiconductors and software stacks. Most recently, SSL has been the target as more and more people see connected lighting as an IoT backbone.
The Adesto deal represents a total equity value of $45 million for Echelon. The stock had been trading in the $4 range most recently. But clearly Adesto sees value in installed Echelon industrial-network nodes that are part of control networks based on what the company calls LON (local operating network) technology.
“With the acquisition of Echelon, we are continuing to advance toward our vision of becoming a significant player in semiconductor and communication systems for IoT markets, in particular industrial IoT,” said Narbeh Derhacobian, CEO of Adesto. “Following the acquisition of Echelon, we will be able to provide not only semiconductors, but also powerful software and deep systems and solutions expertise for industrial systems and enterprise automation, with a loyal customer base.”
Still, there could be challenges for the companies closing the deal. WeissLaw LLP issued a press release citing “possible breaches of fiduciary duty” by Echelon and questioned whether the Echelon board acted to maximize shareholder value.
But Echelon’s Sege clearly sees things differently. “This transaction provides immediate and significant value to our stockholders,” said Sege. “The combination of Adesto and Echelon promises to accelerate this growth strategy through expected synergies in product, engineering, sales, marketing, and service. We look forward to working closely with the Adesto team to ensure a smooth transition and complete the transaction as quickly as possible.”