Cree and Ruud Lighting are the latest lighting companies to join the mergers and acquisitions activities that have characterized the lighting industry over the past several years. The announcement, that Cree was acquiring Ruud Lighting, was made on Aug. 17 and involves a stock-and-cash transfer estimated at approximately $525 million. The acquisition of Ruud Lighting gives Durham, N.C.–based Cree, principally known as an LED chip and LED lamp manufacturer, entrée into the luminaire side of the industry. The deal allows Ruud Lighting greater resources to ongoing technological developments in LEDs, and helps them to move faster in meeting market demands for LED products.

Ruud Lighting, based in Racine, Wisc., and founded in 1982, has consistently embraced evolutions in technology, and the company hasn't wavered from that when it comes to solid-state lighting (SSL). It began to steer the majority of its product development toward SSL in 2005 and 2006, well before many of its competitors did so. In 2007, it established BetaLED to focus on LED fixtures for outdoor applications and KramerLED to respond to interior LED luminaire needs.

The deal with Cree might seem uncharacteristic of the independently minded Ruud Lighting, but company founder Al Ruud doesn't see it that way. “Yes, Cree did come to us; it was not something we were looking for, but when you look at the two companies and the values, the cultures, the people, and our core competencies, what we've done complements one another very much.”

The move also speaks to how Ruud sees the future of the lighting industry. “One thing that it [the acquisition] does that I think a lot of people don't recognize is that if we move to the adoption of LEDs, there are more opportunities for the industry,” he says. “There isn't a great need for expanding the legacy industry products that are out there. If we can go and replace the installed base of inefficient 20th century lighting products with LED products, it's a tremendous opportunity for the entire industry.”

Ruud notes that both his company and Cree “share a passion” for expanding the LED industry. Even though Ruud Lighting will become part of Cree, Ruud will remain in Racine with a certain level of independence within Cree's corporate structure. Logistical details of the deal are still being worked out. Also, according to Ruud, the merger should be easy in the sense that the two can easily distinguish between the lighting and the components sides of each business. This will enable each entity to maintain separate research and development departments, but still allow for collaboration between the fixture and components groups as product or technological development requires.

Going forward, Cree and Ruud Lighting's main goal is to look for the opportunities that create the best “overall portfolio synergies.” Ruud admits that there will probably be some consolidation in the supply chain—but that has more to do with reducing any potential confusion in the marketplace. “For the specification community, you'll see a full portfolio product line under Cree and BetaLED. We are one company and will act as one company.” This will also translate to how the two will present at industry trade shows such as Lightfair. Ruud indicated that the BetaLED 2012 Lightfair booth will feature all Cree lighting systems and the Cree booth will highlight Cree's components, in order to respond to the different customer bases.

As part of the merger, Ruud has joined the board of Cree and will serve as vice chairman of lighting. His primary responsibility will be on the lighting side of the business. His son, Christopher Ruud, will continue as president of Ruud Lighting. “The acquisition was the right thing to do and provides opportunities for our staff here [in Racine], because it provides for more rapid growth,” says the elder Ruud. “We are looking for the best way to use the people and resources that we have. They are a very important resource and there are no jobs at risk in this situation.”