Phoenix Acquires Rig-A-Lite, adds Industrial Lighting Scale

Last week Phoenix Lighting announced that they acquired Rig-A-Lite. The combination of Phoenix and Rig-A-Lite brings a stronger industrial lighting player to the market as Phoenix “scales up”.

The sale of Rig-A-Lite was not surprising given that

• Rig-A-Lite had been acquired by AZZ in 1990. At the time, it’s core markets for its industrial lighting were oil, gas, and other hazardous environments.
• It had been part of Anvil Infrastructure Solutions, which was part of AZZ Industries.
• AZZ’s Electrical Products Group, which combined Atkinson, Calvert and Rig-A-Lite was formed in 1993.
• The major element of Anvil was its Electrical Products Group, which was sold to nVent last March, leaving Anvil with solely Rig-A-Lite.
• And, since Rig-A-Lite was part of, essentially, an orphan division and not an area of growth for AZZ, the inevitable was that it would be sold. The question remained, to whom.

At the same time, Phoenix Lighting, a relatively small but focused industrial lighting company that sells through distribution but also has elements of its business where it will sell direct to specific markets / customers, and is owned by a PE firm, had a need to grow. There were rumors that they were to be the unnamed resource / partner for Cree Lighting. The intriguing element of this is that Phoenix’ strength – the industrial segment – was not the core product offering that could have kept Cree alive. If they were the rumor, they dodged a bullet.

While both compete in the space, and have product overlap, they have different business approaches and segments of the market that they played in.

Both companies sell to electrical distribution, primarily through lighting agents and while Rig-A-Lite focuses on the industrial segment, F&B, Oil / Gas, and Wastewater, and Phoenix does participate there, Phoenix also has business focused in the marine segment (including ports) and mining with much of this business being direct sales. Both companies seek to develop, and hold, specs.

At a cursory level there appears to be overlap, however, due to end-user specs, there could be some brand preference. It will be interesting to see how these companies integrate to find synergies to drive revenue, capture agent share of mind to drive more localized sales, and how the company leverages the overall business to pursue larger / national accounts at the end-user side.

With Cooper Lighting expanding its offering via the acquisition of Nemalux, Acuity’s Holophane, Dialight, Eaton’s Crouse Hinds division offering industrial lighting, Appleton having industrial lighting, and then there are other smaller companies, the industrial lighting space is competitive for a market which is a small segment of the overall lighting market. Much depends upon generating specs (which requires marketing the value proposition), identifying value-engineering opportunities (as not everything is hard specs), capturing sales agency share (whether lighting agents or manufacturer reps), and distributor relationships. The established players have reputations. The small players need to be easy to do business and …

Adding scale will help Phoenix. The question is, “what’s next?”