Thorn Lighting plans pounds 225m flotation a year after buyout

THORN Lighting Group is coming to the market through a pounds 225m flotation a year after its management paid pounds 172m to buy the company out of Thorn EMI, writes Tom Stevenson.

Thorn, one of the biggest lighting systems suppliers in the world, is responsible for lighting the Channel Tunnel terminal at Cheriton in Kent, the interior of Durham Cathedral and the Tower of London.

Other high-profile contracts include the supply of more than 2,200 taxi-way lights at the newly opened Kansai International Airport in Osaka, Japan, and outdoor lights at the Lillehammer Winter Olympics.

Thorn operates in a range of commercial, public and industrial markets but no longer manufactures light bulbs, a commodity market dominated by General Electric, Siemens and Philips.

The public is expected to be offered shares worth pounds 30m when Thorn floats later this year. Institutions will probably provide a further pounds 90m, which will be used to pay down debts.

Thorn EMI is expected to hold on to most of its 12 per cent stake in its former subsidiary. Investcorp, the Middle Eastern investment bank which backed the August 1993 management buyout, is also likely to retain its shares.

Despite recession in all Thorn's leading markets, profits have grown sharply over the past two years, largely thanks to a 22 per cent reduction in the workforce. In the year to March operating profit was pounds 20.4m, 85 per cent higher than the pounds 11m achieved in 1992.

Hamish Bryce, chairman, said: 'The flotation should enable TLG to build on its success to date through further investment in new products'.

Thorn operates in 23 countries, in eight of which it has manufacturing plants. With 4,000 employees, it is the second-largest supplier of light fittings in Europe after Philips, and is the market leader in the UK.

The company also announced the appointment of Sir Christopher Benson as non-executive deputy chairman. He is currently chairman of Sun Alliance and Costain. Ian Clubb, finance director of BOC and chairman- designate of Tiphook, joins the board as a non-executive director.

Investcorp, which was founded in 1982 to serve investors in the Gulf, has arranged acquisitions worth over dollars 6.5bn. It owns 15 companies and in 1987 bought Tiffany & Co, the New York jeweller, to the market.