Nexxus Lighting, Inc. has announced that it has completed the sale of certain assets of its legacy Commercial and Pool businesses to Next Step Products, LLC. The divested businesses consist of the manufacture, marketing and sale of fiber optic lighting and LED products used for applications in commercial, architectural, pool and spa markets, but does not include the company’s Array business or the business of its wholly-owned subsidiary, Lumificient Corporation.
The divested assets consist primarily of trade receivables, inventory, equipment and intangible assets related to the legacy businesses. Under the terms of the transaction, Next Step paid Nexxus $1 million at closing, and will pay approximately $1.3 million over the following 7 months under the terms of the purchase agreement and a related promissory note.
Mike Bauer, President and Chief Executive Officer of Nexxus, stated: “The divestiture of these businesses fits with our strategic plans to focus our resources on our Array Lighting replacement lamp and Lumificient businesses, serving expanding markets with more significant long term growth potential. The legacy businesses have struggled with difficult market conditions, increased competition, significant margin pressure and continuing operating losses. This transaction envelops the company around our competitive advantages and we believe that it will result in significant benefits for our shareholders, employees and customers.”
Mark Masterman, Nexxus’ former division president for the businesses, organized Next Step and will continue to manage the businesses. The units had approximately 20 employees and generated revenue of approximately $6.6 million and $4.1 million in 2009 and year-to-date June 2010, with proforma operating losses of approximately $1.3 million and $0.8 million for the same periods, respectively.
Next Step will operate from Nexxus’ Orlando facility under a sublease agreement for a period of between 6 and 9 months. Nexxus has transferred warehouse and distribution operations for the Array product line to a 3rd party distribution company and there will be no disruption of Array shipments due to this transaction.
