Sarasota, Fla.-based Evolucia Inc. and Warsaw, Poland-based SETE Sp. z o.o. have announced a joint venture whereby the companies will work together to manufacture, market and sell Evolucia’s proprietary energy-efficient LEDs throughout Europe under the Evolucia brand.
The joint venture calls for the payment of $11 million (8.5 million Euros) to Evolucia by Aug. 31, 2013, for the manufacture and distribution rights to the European markets. Under the joint venture agreement, a new entity called Evolucia Europe Sp. z o.o. will be created, with Evolucia Inc. holding a 51 percent ownership share and SETE holding the remaining 49 percent ownership. The joint venture agreement provides exclusive manufacturing rights to Evolucia Europe for the European markets. Production of the Evolucia LED Aimed Optics fixtures is expected to begin in 2013 at the manufacturing facility in Radom, Poland.
“This joint venture is a testament to the hard work and vision that is shared between our two organizations and the importance of delivering world-class lighting solutions to our strategically focused markets around the world. This agreement signals the start of an international expansion for our company. Solid State Lighting will continue to develop for years to come and our experience is that global customers and investors are looking at key enablers in the market, with innovative design concepts that change the course of challenging applications, like our proprietary Aimed Optics technology,” says Mel Interiano, Evolucia CEO. “This critical $11 million [8.5 million Euros] investment allows us to leverage key strengths to build a world-class global lighting organization capable of supporting what we believe will be significant revenue growth in the short term with the ability to expand over the long term.”
“This licensing fee will add $9.9 million [7.7 million Euros] to incremental free cash flow after associated expenses in 2013 (the equivalent effect of nearly $45 million, 34.8 million Euros, in revenues) and represents step one of a broader, multi-step plan we are implementing this year as part of our financial roadmap to strengthen the company’s balance sheet,” says Charles Rockwood, executive vice president and chief financial officer, Evolucia.
Evolucia Europe will be headquartered in Warsaw and will report to the U.S.-based Evolucia Inc. Arkadiusz Pietrzykowski has been named president of Evolucia Europe and will report to Interiano. Municipal and public sector lighting accounts for 75 million points of light across Europe. The European Union has embarked on an effort to reduce energy consumption and carbon emissions by 2024. High Pressure Sodium used throughout Europe for street, roadway and parking lot lighting has been targeted for replacement opening up this large market to Evolucia’s Aimed Optics LED Cobra Head roadway lighting solutions. Poland currently accounts for 5 percent of the total market. The Evolucia LED Cobra Head fixture captured two European awards winning the Best Product in the 19th International Fair of Lighting Equipment, LIGHT 2011, and the Leader of Sustainable Development during the 5th Economic Forum “Energy and Environment” in Warsaw in 2011.
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