On May 27th, Philips, one of the two international giants in the lighting industry, spun off Philips Lighting on the Amsterdam Stock Exchange in the Netherlands. During the same period, another giant, Osram, announced that its general lighting subsidiary will be officially split on July 1, involving revenues of 14.7 billion yuan.
Several LED companies in China are gearing up for this. The world's top ten Mu Linsen Co., Ltd. (hereinafter referred to as "Mulinsen") is also among them.
Ten days ago, the "Proposal on Agreeing the Company to Participate in the Bidding Consortium to Submit a Legally Binding Tender to OSRAMLichtAG (hereinafter referred to as "Osram") was reviewed and approved by the Mulinsen Board of Directors. On the same day, Mu Linsen announced that he would invest 500 million yuan in partnership with Harmony Haoquan Investment Management (Beijing) Co., Ltd. (hereinafter referred to as “Harmonious Haohaoâ€). Mulinsen executive general manager Lin Jiliang told reporters that the purpose of this cooperation is to acquire high-quality assets in the LED industry through capital operations such as funds, and is not limited to a certain project.
Mulinsen's acquisition of Osram's lighting business partner was the international capital IDG ranked first in the country with 132 investments last year. For the news of the industry's madness, Lin Jiliang confirmed to reporters, and the above-mentioned harmonious number is also a company owned by IDG Capital.
Interacting with IDG, an internationally renowned fund, and actively acquiring international giant assets with revenues of nearly 15 billion yuan. Why is Mulinsen?
Not a "snake swallow"
On the evening of May 16, in the building of No. 1 Mulinsen Avenue, Xiaolan Town, Mr. Sun Qinghuan, chairman of Mulinsen, and six other directors voted in the conference room on the 5th floor.
In fact, as early as November 7 last year, Mulinsen announced that he would participate in the bidding for some of Osram's lighting business assets. However, for some time, Mulinsen did not disclose more information on the acquisition. This time, it is obviously speeding up the acquisition.
The announcement on May 17 will be announced immediately. In order to promote the internationalization process and improve the strategic layout of the LED (Light Emitting Diode) industry, Mulinsen decided to form a bidding consortium with the partners, participate in the bidding for the acquisition of some of Osram's lighting business assets, and submit a legally binding tender to Osram. Agree to authorize Chairman Sun Qinghuan to sign legal documents related to this transaction, such as tenders.
According to public information, OSRAM, one of the world's two major lighting companies, is headquartered in Munich, Germany, and is the same as Philips. Compared with Osram, Mulinsen is currently ranked slightly lower in the LED lighting industry, and its industrial advantage is concentrated in the midstream packaging market.
This bidding will inevitably remind the industry of the case of Chinese companies reversely acquiring international giants. For example, when Beijing No. 1 Machine Tool Plant acquired Coburg in Germany, and finally Chinese-funded enterprises obtained relevant technology, German companies gained sales channels and marketing markets for Chinese companies.
Moreover, the bid for Osram's divestiture assets is fierce. In addition to Mulinsen, there are also large companies such as Dehao Runda participating in the bidding.
Why is Mulinsen so confident?
"I believe that the completion of the bid, the impact on Mulinsen and Osram will definitely be 1+1"." Lin Jiliang is very clear about the purpose of the bid, he said that Osram is the world's second largest lighting company with excellent industrial advantages and brands. Image and marketing channels, Mulinsen is the world's largest provider of low-power white LED market, the combination of the two will play a huge synergy.
According to the reporter's public information, the OSRAM business consists of five major components: CLB (traditional lighting and ballast), LLS (LED lights and systems), L&S (lights and solutions), SL (special lighting, with car lights). Main) and OS (optoelectronic semiconductors, mainly LED chips and devices). With the shrinking of the traditional LED lighting market, OSRAM's traditional lighting business has seen a significant downward trend. In June 2015, the OSRAM Supervisory Board approved its plan to split the channel business. The split mainly consists of CLB and LLS.
The surface looks like a reverse purchase of a "snake swallow". Actually, it is not entirely true.
In the last year's annual report, Mu Linsen's main business came from Lamp LED (in-line LED) and SMD LED (surface-mounted LED). The company's gross profit margin exceeded 20%. According to financial report data, in the past four years, Mulinsen SMD LED products revenue was 600 million yuan, 1.298 billion yuan and 2.079 billion yuan, 2.234 billion yuan, LED application product revenue was 168 million yuan, 279 million yuan and 591 million yuan, 5.76 yuan. 100 million yuan.
"SMD is the mainstream of global general lighting products. This one is the largest in the world. We also occupy almost 50% market share in China's white light SMD LED. This is a very powerful part of us. So this advantage, the future in this field The completion of the bidding will have a very large support for Osram." Lin Jiliang believes that after completing the bidding, OSRAM will actually enhance and enhance the LED business and technology to obtain better profit margins. Osram, which has a globally renowned brand and sales channels covering 150 countries, provides a good “seaport†for Mulinsen, which is expanding rapidly.
Industrial layout behind 14.7 billion yuan
More intense than the discussion of "snake swallow", it is also the revenue of the acquisition project - nearly 150 billion yuan.
For the value of the bidding, Mulinsen executives said it was still a trade secret.
Reporters from the public data query, Osram's general lighting subsidiary Ledvance, which will be split in July, reached a revenue of nearly 2 billion euros (RMB 14.7 billion) in the fiscal year 2014 to 2015.
In other words, the revenue of this acquisition target reached nearly 15 billion yuan, will Mu Linsen suffer a lot of financial pressure?
Statistics show that in 2015, the global LED output value (including visible light and invisible light LED) reached 14.325 billion US dollars, and the annual recession reached 3%; among them, the LED chip market reached 2.02 billion US dollars, with an annual decline of 7%, showing negative growth for the first time; LED The packaging market is 8.8 billion US dollars, with an annual growth rate of only 2%. Among them, Chinese manufacturers grew by 7%, while international manufacturers fell by 10%.
In the growth stage, Mulinsen has the advantage of focusing on the LED packaging market.
After two consecutive years of global market “waist†price decline, in the view of Mulinsen executives, in the first quarter of this year, the company achieved a “significant rebound†in both gross profit margin and revenue. The company’s cash flow is also relatively healthy, and the acquisition does not exist. Financial pressure.
Another example of cash flow comes from another announcement disclosed by Mulinsen on May 26.
Mulinsen issued the "Report on the Issuance of Non-public Issuance of Shares and the Announcement of Listing", raising a total of more than 2.3 billion yuan. According to the announcement, the funds raised by Mulinsen will be used for the three LED technology transformation projects of the company's own advantageous industrial layout. Among them, Xiaolan SMD LED packaging technology transformation project plans to use 616 million yuan of raised funds. The first phase of Ji'an SMD LED packaging project is planned to invest 943 million yuan, and another 757 million yuan of funds will be invested in the first phase of the new LED application lighting construction project.
If this is just a technical transformation investment based on the scale of its own industry, since it was listed in February last year, it has gradually entered the mature stage of Mulinsen, and its industrial development is basically around the capital M&A. Thanks to the capital acquisition, Mulinsen's industrial layout has gradually become clear.
In September last year, Mulinsen invested RMB 180 million in its own funds to develop Jingjing Lighting (Xiamen) Co., Ltd. (hereinafter referred to as “Development Jingâ€), and acquired 10.91% of the shares of Jingjing through capital increase and share expansion. Thanks to this acquisition, Mulinsen gained the advantage of developing high-power LEDs, introducing high-end LED devices and perfecting the product line from the supply side.
In March of this year, Mu Linsen and Yan Jianguo signed a letter of intent to acquire Super Time Light Source (Group) Co., Ltd. (hereinafter referred to as "Super Time Light Source"). Mu Linsen intends to purchase 80% of the shares of Chaoshi Light Source held by Yan Jianguo in cash. The transaction price was initially determined by both parties and the value was 300 million yuan to 350 million yuan. This time, Super Time Light Source, as the largest LED filament lamp manufacturer in China, not only extends the Mulinsen industrial chain to downstream application products, but also perfects the supply chain, and also enjoys the European supermarket channel of super-era light source.
In the eyes of LED industry insiders, Mulinsen's competition for Osram's lighting business is mainly based on the large-scale M&A demand of industrial layout. With the advantages of multinational giants' channel business and brand image, once successful mergers and acquisitions, Mulinsen will expand its overseas lighting business and further extend the industrial chain to the downstream, and the terminal marketing market, especially the European and American markets, will be improved.
International capital surging
In the whole year of 2015, among the open investment projects in China, it ranked first with 132 investment. It has invested in IDG capital of Tencent Baidu and Xiaomi, witnessed the listing or merger of over 100 companies, and recently came quietly. Zhongshan.
This time IDG joined the "bidding consortium", Mulinsen was therefore considered by the industry to be a strong buyer of the OSRAM lighting business.
According to public information, IDG has long begun to lay out the LED industry. In 2010, he teamed up with Jinshajiang Venture Capital Fund to invest in Yimeixinguang (Beijing) Technology Co., Ltd. to jointly create the flagship of high-brightness light-emitting diode (HB LED). Another well-watched action of IDG is to invest in domestic chip supplier giant Huacan Optoelectronics.
Huacan Optoelectronics is another intersection of IDG and Mulinsen.
On the evening of April 10, Mulinsen and Huacan Optoelectronics signed the "Strategic Cooperation Agreement." According to the agreement, Mulinsen will preferentially purchase Huacan Optoelectronics products under the same conditions. In the next three years, Mulinsen will purchase the value of LED chip products from Huacan Optoelectronics not less than RMB 1.5 billion. In the cooperation, Huacan Optoelectronics will give priority to the supply of Mulinsen, and taking into account the large-scale procurement of Mulinsen's single product, Huacan Optoelectronics promises to give Mulinsen the best price protection. Huacan Optoelectronics will do everything possible to guarantee the supply of Mulinsen. The quantity of goods reached the target.
This time, Mulinsen's layout began to extend to the upstream of the LED industry, which is the chip field. Huacan Optoelectronics also promised that Mulinsen will give priority to the distribution of new capacity released after the Yiwu new plant is put into production, and guarantee the future expansion of Mlinsen's demand for LED chips. As one of the shareholders of Huacan Optoelectronics, IDG has been interacting with Mulinsen as early as possible before bidding.
"You (LP) pay, I (GP) contribute." Is the most vivid metaphor of venture capital. After a series of formalities, LP (Limited Partner) will hand over their money to GP (general partner) to take care of, and GP will take the money of LP to the investment project and get profits from it. Profit is divided.
Mulinsen and IDG have recently begun to explore such capital cooperation. On May 16, Mu Linsen and IDG's Harmony Hao signed the "Limited Partnership Investor Agreement Letter of Intent", intending to use its own funds of 500 million yuan to establish a limited partnership with Harmony or its affiliates and other investors. As a LP, Mulinsen participated in corporate investment, that is, obtained equity in high-tech enterprises in the LED industry by participating in capital increase and equity transfer, and acquired high-quality assets in the LED industry.
“Mullin has a very clear plan, and in this process, we need cooperation in the capital market. Our cooperation is not limited to IDG. At present, many foreign M&A funds are negotiating cooperation with us.†Lin Jiliang believes that Chinese companies in the LED industry Frequent overseas mergers and acquisitions are mainly based on the needs of industrial integration. “The output value of China's lighting industry accounts for 70% of the global output value. However, because the scale and industrial chain are not perfect, there has not been a global brand with the right to speak. Only in the industry. The chain really has the upper and lower reaches, in order to have the right to decide at the terminal."
From LED manufacturing countries to LED technology countries, Mulinsen is speeding up the solution to both the supply side and the demand side. With various high-quality projects and capital strength, we will build a completed product ecosystem and supply chain, improve the company's LED industry chain layout, and strengthen its core competitiveness.
At this point, Mulinsen's industrial layout has gradually become clear.
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