By Thomas Gryta and Cara Lombardo
General Electric Co. is getting out of the business of making lightbulbs, selling a unit that defined the company for nearly a century and was its last direct link to consumers.
GE said it would sell its lighting business to Savant Systems Inc., a seller of home-automation technology. Terms of the deal weren't disclosed, but the transaction valued the unit at around $250 million, including assumed liabilities, according to a person familiar with the matter. The deal had an equity value of less than $100 million, this person said.
GE had been looking to sell the business for several years. The conglomerate once made refrigerators and microwaves as well as bulbs but has exited those consumer businesses as part of a yearslong restructuring. It has shifted its focus to making heavy equipment, like power turbines, aircraft engines and hospital machines.
GE Lighting will remain based in Cleveland, and its more than 700 employees will transfer to Savant, which will also get a long-term license for the GE brand. GE no longer discloses revenue for the lighting business, which it slimmed down over the years.
The unit traces its roots back to GE's founding 130 years ago when Thomas Edison invented the first viable incandescent lamp. In 1935, the first Major League Baseball night game was played under GE lights. A GE engineer invented the LED light in 1962.
For decades, GE's home appliances and lightbulbs formed a link between American consumers and one of the country's oldest and largest industrial companies. The company's popular TV ad campaigns promised to "Bring good things to life," but the growth and profitability of the consumer businesses waned.
GE got out of making television sets and small appliances like toasters under former Chief Executive Officer Jack Welch. His successor, Jeff Immelt, continued the shift, exiting the NBCUniversal media business and in 2016 selling the large appliances business to Haier Group. GE gave the Chinese buyer the right to continue to use its brand on stoves, fridges and other appliances for several decades as part of the deal. Thousands of workers and a sprawling factory complex in Louisville, Ky., were transferred in that deal.
More recently, the company has been selling off industrial units -- such as its locomotive, oil-equipment and biopharma units. It has used the proceeds to pare down its debts after a plunge in profits at its power and financial-services divisions prompted the company to slash its cash dividend to a token penny a share and overhaul its board and executive ranks. It has also shrunk GE's scope -- leaving the company with about 205,000 employees at the start of 2020.
CEO Larry Culp, who took over in 2018, had depended on GE's thriving aviation division in order to turn around the company, but the coronavirus pandemic has crippled the airline industry. GE has cut thousands of jobs in its aviation business and warned that a restructuring of its large power unit could take years.
GE had previously shed its Current business, which sold commercial lighting systems, along with parts of its overseas lighting operations. GE's traditional bulb rivals have also scaled back in the past decade, and many of the buyers have been Chinese companies.
GE spent years trying to sell the lighting business, a largely commoditized and low-margin division, before striking the deal to sell its Current business in 2018. The company had spoken to Chinese suitors about the lighting business, but pivoted as the Trump administration increased scrutiny of the security risks of selling to Chinese companies, the person familiar with the matter said.
The transaction is expected to close quickly, possibly within a month, due to it being structured in a way that will limit antitrust clearance required, this person said.
Savant, founded in 2005, is based in Hyannis, Mass. The company specializes in smart-home systems that control features such as lighting, entertainment, temperature and security settings all in one place.
Robert Madonna, Savant's founder and CEO, said he plans to maintain Savant as a premium brand and use the GE Lighting business to sell products to the consumer market. GE Lighting already sells smart-home lighting and switches through its "C by GE" branding.
"Lighting is an extremely important piece of the smart home," Mr. Madonna said. "And you can do it at a consumer price point."
UBS Group AG was GE's financial adviser.
Write to Thomas Gryta at firstname.lastname@example.org and Cara Lombardo at email@example.com