Boston-based Color Kinetics Inc., a maker of LED lighting systems and technologies, announced today it has approved an acquisition bid by Royal Philips Electronics. Philips, based in Amsterdam, The Netherlands, said it will acquire all of the outstanding shares of Color Kinetics for $34 per share, or a total of approximately $791 million. The acquisition is subject to customary regulatory approvals and is expected to close in the third quarter of 2007. The implied enterprise value of Color Kinetics in this offer is $688 million, taking into account approximately $100 million of cash on balance sheet as of March 31, Philips said. The merged entity will operate under the name Philips Solid-State Lighting Solutions, and intelligent and premium LED product lines will ultimately be co-branded Philips/Color Kinetics, Color Kinetics said in a statement. Philips' and Color Kinetics' LED fixtures and Color Kinetics' OEM modules will be marketed under the co-brand in the US and Canada by Color Kinetics' sales force. The new company will be headquartered in Burlington, Mass., and will become the leading global research and development center of innovation for all LED-based fixture or "luminaire" product lines. The LED luminaire portion of Philips' existing North American operation in New Jersey will be merged with the Burlington operation. Color Kinetics will cease to be publicly listed on the NASDAQ stock exchange. Bill Sims, president and CEO of Color Kinetics, said, "We have long said that LEDs are the future of illumination -- not a passing novelty -- and we've supported that view with unwavering focus on the research and development of new technologies, sales channels, partnerships and industry initiatives to make it a reality. Today we announce our biggest and most significant step towards putting our core technology and IP at the heart of every future application of intelligent LED lighting. We believe that joining Philips, the global lighting leader, is in the best interest of our shareholders, customers, partners, and employees, and that our combined resources will produce the best possible entity to drive the LED lighting revolution forward." The merger builds on Philips' acquisition of Lumileds in 2005 and of TIR Systems earlier this year, which provided Philips with a strong line of solid-state Lighting (SSL) modules used to deliver integrated lighting products to fixture manufacturers, the company said. Philips said the market for SSL is "at an inflection point for growth as the performance of LEDs measured in lumens per watt is rapidly becoming competitive with traditional light sources. While the market for SSL has up until now been driven by the application of color LEDs, technology in white light has improved significantly, which Philips expects will cause market growth to increase substantially going forward." Theo van Deursen, chief executive of Philips' lighting division, said, "This acquisition uniquely positions Philips as a major player in the fast-growing SSL business with technology, expertise and intellectual property in all parts of the value chain of integrated LED-based lighting solutions. The technological platform obtained through this acquisition will serve as a springboard for Philips to further create sustainable value through making innovative LED lighting solutions widely available." For more information, visit: www.colorkinetics.com