General Electric started looking to sell its iconic lighting business three years ago. It took a while, but the Boston-based company didn’t have to leave the state to find a buyer.
Savant Systems, a smart-home tech company in Hyannis, has signed an agreement to buy GE Lighting for an undisclosed amount. Savant chief executive Robert Madonna notified his roughly 180 employees about the deal on Wednesday. It’s expected to close by early July.
GE Lighting, which dates back nearly 130 years to GE cofounder Thomas Edison, is the last of GE’s consumer-focused business lines; its bulbs can be found in Home Depot and Lowe’s. Lighting represented a tiny fraction of GE’s $95 billion in revenue last year, so small that GE lumped it into “corporate revenues” and didn’t publicly break out lighting as its own division. However, its brand recognition remains high. Savant will continue to use the GE Lighting name through a licensing agreement, much as Haier has been doing since it acquired GE Appliances in 2016.
For Savant’s CEO, buying GE Lighting could be the deal of a lifetime.
“This is probably the most exciting thing in all of my career that we’ve done,” Madonna said. “This is a big deal not just for Savant, but for the smart-home industry. The combination of Savant’s innovation and GE’s lighting brand and consumer reach, it’s a powerhouse.”
GE Lighting employs about 725 people, mostly in the Cleveland area. The unit’s chief executive, Bill Lacey, will continue to run the business out of its East Cleveland headquarters, Madonna said, and he plans to keep the entire management team in place.
In a statement, GE chief executive Larry Culp described the deal as “another important step in the transformation of GE into a more focused industrial company.” Culp said GE Lighting employees “will join a fast-growing leader in home automation that shares their passion for bringing the future to light.”
GE first confirmed that it was looking to sell the lighting business in 2017, after the conglomerate had moved to Boston but before it had begun a series of significant divestitures under Culp and former chief executive John Flannery. GE sold its industrial lighting business, Current, to a private equity firm in early 2019, but had not identified a buyer for the consumer lighting group at the time.
In Savant’s case, Madonna said preliminary discussions began with GE about a year ago. By the fall, he said, both sides were working toward this acquisition. Most of his negotiations were with executives in Ohio, not in Boston.
“We were right in the midst of this deal before the pandemic hit,” Madonna said. “All of a sudden being able to have connectivity and smart tech in your home is almost more important now than it was six months ago. The synergies of these two companies were so strong going into it that it still makes sense, if not more sense.”
Madonna might be better known in local tech circles for his leadership of Excel Switching, a company that Lucent agreed to buy in 1999 in a deal valued at $1.7 billion.
Madonna said he started Savant in 2005 after trying to install an automation system at his apartment in New York and finding that nothing seemed to work. He immediately saw a market for a smart-tech company serving luxury homes. The management-owned Savant is based in a Hyannis building that Excel Switching once occupied, Madonna said, and many of its executives worked with Madonna at Excel.
Savant offers hardware and software for high-end homes that can connect thermostats, speakers, TVs, and lights, among other devices, all installed by professionals, Madonna said. He said GE Lighting will be Savant’s first foray into mass-market consumer products.
“That brand . . . really brings smart-home technology to a much larger crowd,” he said.