With its high-quality light sources, the Munich-based company benefited from the trend towards interior design during the pandemic.
(Photo: Occhio)
Frankfurt According to financial circles, the Munich-based company Occhio, which specializes in high-quality designer lights, is looking for an investor who will provide capital for further growth. The investment company EMH Partners, which joined five years ago, wants to sell part of its majority stake. The Meise founding family also wants to reduce its stake, as several people familiar with the transaction said.
The investment bank Goldman Sachs is organizing the investor process, which should start in the coming weeks. Occhio, EMH and Goldman Sachs all declined to comment.
The current owners hope for a valuation of more than 600 million euros, including debt. This would correspond to 15 times the expected operating profit (Ebitda) for 2022 of around 40 million euros.
Potential bidders point to a gradual leveling off in construction activity and the general economic trend, which will reduce demand for luxury lights and thus Occhio’s valuation. Accordingly, they expect a significantly lower rating.
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The market for lamps and lighting in Europe alone is a good 50 billion euros, but it is considered difficult: it is highly fragmented, with few global brands, and mass suppliers are posting little growth.
The Austrian Zumtobel Group, for example, expects an increase in sales of three to six percent and a return (EBIT margin) of four to five percent for the 2021/22 financial year. Signify, the former lamp division of Philips, has the same sales target, but sees a margin (EBITA) of around eleven percent this year.
The German manufacturer Osram, which was taken over by the Austrian company AMS, is expecting an increase in revenue of only zero to three percent in its lighting business by 2026. After the company has parted with less profitable products, an adjusted EBIT margin of twelve to 17 percent is targeted.
Exceptions are manufacturers of expensive design lights such as Occhio, who also offer luxury products for private households as well as high-quality lighting concepts for companies. Founded in 1999, the company has grown at double-digit rates in recent years. According to financial circles, the company posted an operating profit of around ten million euros with sales of 72 million euros in the 2020 financial year, last year it was around 30 million euros with sales of 120 million euros
Investors are crowding into the industry
Competitors in the luxury segment are also reporting strong growth. The Italian design holding of the investors Carlyle and Investindustrial, for example, has bought a portfolio of lamp and furniture brands in recent years.
The goal: to create a “LVMH of design”, as company boss Daniel Lalonde puts it. In 2021, the group posted an Ebitda of 161 million on sales of 676 million, a good 20 percent more than in the previous year. In the lamp segment, the holding company offers brands such as Flos and Louis Poulsen.
According to industry circles, companies such as Artemide with the well-known “Tolomeo” lamp or Foscarini with the German company Ingo Maurer with the “Zettel’z” brand, which was bought in May, are still happy about stable growth rates and profits.
“Cocooning” during the corona pandemic played a role in this. Many wealthy private customers used the lockdowns to beautify their homes and equip the home office with high-quality work lights. “We seem to be having a boom,” said founder Axel Meise in an interview with the Handelsblatt after the outbreak of the corona pandemic.
With the help of the investor EMH, Occhio has internationalized its business in recent years. Most recently, the company opened a flagship store in Shanghai in April, including a VIP room for tea ceremonies. In autumn 2021, the Munich-based company took over the Viennese company LR Innovation Lab.
As in other sectors, private equity is increasingly shaping the market here. Most recently, Hamburg-based Private Assets AG bought the lighting provider Insta Lighting at the end of July.
More: Designer lighting company Occhio wants to break the 100 million euro mark