FOS Capital (ASX: FOS) has made a game-changing, $3 million bid to acquire highly-regarded Australian lighting manufacturer KLIK Systems.
The “transformative” binding acquisition agreement is being undertaken via the subsidiary FOS Lighting and adds a company with 40 plus years of architecturally respected lighting manufacturing to the FOS stable.
The acquisition price is made up of $2 million cash on completion and $1 million in cash 12 months after the deal is wrapped up.
The deal is expected to be finalised within the next 2 weeks and FOS is funding the acquisition via existing cash and debt facilities.
Linear lighting growth
Managing director, Con Scrinis, said adding KLIK to FOS’ portfolio will add significantly to the company’s market share in linear lighting, while providing a platform to consolidate manufacturing operations for its fastest growing product line.
“This transformative acquisition of KLIK is the next chapter in establishing FOS as the pre-eminent Australian lighting manufacturer,” Mr Scrinis said.
“There will be significant operational benefits with the increased volumes and the ability to further rationalise fixed costs as we share knowledge and resources across the group. KLIK also provides FOS with its first substantial export market outside of New Zealand with the ability to increase export sales of our broader product range.”
40 years of operations
Sydney-based KLIK was established over 40 years ago with the aim of manufacturing commercial, industrial and architectural LED linear and handrail lighting.
Having grown consistently since its launch, the company currently has 31 employees and services the Australian commercial lighting market with sales offices and distributors in all capital cities.
It has also spread globally with around 25% of its income coming from export markets with the company building a significant presence in the USA.
KLIK achieved financial year 2023 sales of $8 million.
Growth by acquisition
FOS has built a record of obtaining market share and physical growth through strategic acquisitions.
Initially established as a fluorescent lighting manufacturer in the 1970s, FOS Lighting then expanded with the acquisition of Sun Lighting in the 1980s, before established Moonlighting in the early 1990’s.
In 1999, all these businesses were merged together to create a highly regarded manufacturer and distributor of commercial and industrial lighting products.
Recent lighting buys
The KLIK purchase follows a number of recent lighting company acquisitions.
In late 2022, FOS acquired the Hawko Lighting Group.
Like KLIK, Hawko has a significant history supplying the building trade with more than 30 years of operation.
The Sunshine Coast, Queensland-based company, which has continued trading as a stand-alone Hawko brand, manufactures an extensive range of LED linear lighting.
Prior to the Hawko deal, FOS acquired the Brisbane-based Frend & Megabay Lighting businesses in June 2019 and JSB Lighting in November 2020.
It then listed on the ASX in June 2021 and acquired Ecopoint Lighting New Zealand in October 2021.