Philips lighting company to purchase Color Kinetics

AMSTERDAM, Netherlands (AP) — Royal Philips Electronics NV said Tuesday it is offering about $688 million for Color Kinetics Inc., and the Boston-based lighting company's management supports the deal.

Amsterdam-based Philips is the world's largest lighting company, while Color Kinetics makes Light Emitting Diode lighting systems for professionals.

LEDs are relatively expensive, but have the ability to produce light in any color, and are both energy-efficient and long-lasting. They are expected to win market share as their cost falls in comparison with incandescent, halogen and compact fluorescent lights.

Philips is offering $34 per share for Color Kinetics, a 14 percent premium over its closing price Monday of $29.79. Color Kinetics shares had risen by about 50 percent since April 1.

"There was quite a run-up during the process" of negotiating the deal, Philips Lighting CEO Theo van Deursen said in a telephone interview. He said the discussions were confidential as far as the companies knew.

Van Deursen said the offer for Color Kinetics in part reflects important patents it holds on how LED lighting is controlled, specifically the software and hardware that makes it possible to adjust color and brightness. These will become more important in the future as other companies — including Philips — have licensed the technology.

Color Kinetics had sales of $65 million in 2006.