General Electric has finally found a buyer for its lighting business and will be selling off its last consumer-facing business after more than 120 years of operation.
Boston-based GE said today it would divest the lighting business to Savant Systems, a smart home management company also based in Massachusetts. The companies did not disclose financial terms of the deal, but sources told The Wall Street Journal that the transaction was valued at about $250 million.
Savant specializes in full smart home systems for the luxury market. Acquiring a lighting business directly will allow it to take advantage of vertical integration and take more control over the physical equipment it installs in consumer’ homes. Savant will keep the business’s operations in Cleveland, where it is currently based, and will receive a long-term license to keep using the GE branding for its products.
The lighting business is GE’s oldest segment, dating all the way back to the company’s founding through a series of mergers with Thomas Edison’s companies in the late 1880s and early 1890s. The company became a conglomerate early, investing in a wide array of technology and communications businesses. It moved toward aviation and energy and away from consumer products through the 1980s and 1990s under CEO Jack Welch. That industrial mindset lasted into the 21st century, under CEO Jeff Immelt, from 2001 through 2017.
By 2017, though, GE was carrying a staggering amount of corporate debt—about $77 billion, analysts estimated—and GE’s stock price dropped heavily through Immelt’s term. In October 2017, the new CEO, John L. Flannery, promised to streamline the company’s operations and divest $20 billion worth of businesses.
Flannery held the top seat for one year before being replaced in October 2018 by H. Lawrence Culp. Culp, who is still CEO today, continued trying to sell off GE’s less profitable businesses. It merged its rail business, called GE Transportation, with Wabtec in 2018, in an $11 billion deal. The GE Life Sciences business followed, going to Danaher Corp. in 2019 for about $20 billion.
The lighting business was actually one of the first on the chopping block, but it took almost three years finally to find a buyer in Savant.
“Today’s transaction is another important step in the transformation of GE into a more focused industrial company,” Culp said in a written statement. “Together with Savant, GE Lighting will continue its legacy of innovation, while we at GE will continue to advance the infrastructure technologies that are core to our company and draw on the roots of our founder, Thomas Edison,” even though GE has now spun off the last of Edison’s original business.