Philips acquires LED company

Color Kinetics to strengthen leading position in LED lighting systems, components and technologies * Combination strengthens Philips' LED portfolio, technology base and intellectual property position The implied enterprise value of Color Kinetics in this offer is EUR 516 million, taking into account approximately EUR 76 million of cash on balance sheet as of March 31, 2007. This transaction is subject to the terms and conditions of the merger agreement and to the approval of Color Kinetics' shareholders, as well as to customary regulatory clearance, and is expected to close in the second half of 2007. This merger builds on the acquisition of Lumileds in 2005, through which Philips ensured a leading position in high-power LED dyes, and on the recent acquisition of TIR Systems, which provided Philips with a strong line of fully-integrated Solid State Lighting (SSL)-modules used to deliver integrated lighting products to fixture manufacturers. "This acquisition uniquely positions Philips as a major player in the fast-growing SSL business with technology, expertise and intellectual property in all parts of the value chain of integrated LED-based lighting solutions," Theo van Deursen, Chief Executive of Philips' Lighting division, said. "The technological platform obtained through this acquisition will serve as a springboard for Philips to further create sustainable value through making innovative LED lighting solutions widely available. We admire Color Kinetics' expertise, which they built up in only 10 years of existence, and we will foster the company's creative and entrepreneurial flair in the future while boosting growth by integrating it into the global lighting leader." "We have long said that LEDs are the future of illumination – not a passing novelty – and we've supported that view with unwavering focus on the research and development of new technologies, sales channels, partnerships and industry initiatives to make it a reality. Today we announce our biggest and most significant step towards putting our core technology and IP at the heart of every future application of intelligent LED lighting," said Bill Sims, President and CEO, Color Kinetics. "We believe that joining Philips, the global lighting leader, is in the best interest of our shareholders, customers, partners, and employees, and that our combined resources will produce the best possible entity to drive the LED lighting revolution forward."