Tivoli Industries to Merge With Italian Firm

Tivoli Industries, a Santa Ana manufacturer of specialty lighting and related products, is being acquired by an Italian firm, Targetti Sankey, for $5.6 million, or $4.50 a share, the companies announced Monday.

Tivoli provides lighting for entertainment centers, casinos and cinemas. Tivoli clients include Disneyland, Disneyworld and Warner Brothers cinemas.

For the nine months ended June 30, Tivoli had revenues of $8.5 million and operating profit of $3.8 million.

Targetti specializes in architectural lighting and has provided lighting for Leonardo da Vinci’s Last Supper in Milan, Michelangelo’s David in Florence as well as the showrooms of Benetton, Hugo Boss and Diesel.

Under the terms of the acquisition, Tivoli will merge with a U.S. unit of Targetti. Targetti will finance the purchase through existing cash and a line of credit.

Tivoli’s management, which owns about 36% of capital, has agreed to the transaction. It is expected to become final after a Tivoli shareholder meeting.

Tivoli has agreed, under certain circumstances, to pay a breakup fee in the event the merger agreement is terminated. Tivoli officials said that all of the company’s 100 employees in Orange County will be retained and that the Tivoli headquarters will remain in Santa Ana.

Since 1994, Targetti and Tivoli have been collaborating under a licensing agreement and, in 1995, formed the Targetti USA Llc joint venture.

Targetti, which was founded in 1928, said the acquisition will secure its presence in North America and follows its strategy of foreign expansion. This will be Targetti’s most significant U.S. operation.

The deal also will provide a link for expansion to the Central American and the Pacific areas, Targetti said. About one-quarter of Tivoli’s $9.6 million in revenue last year came from sales abroad, Tivoli officials said.

Targetti said Terrence C. Walsh, chairman and chief executive officer of Tivoli Industries, will become vice chairman and CEO of the new U.S. subsidiary. Charles F. Kimmel, Tivoli’s president, will retain that position in the new organization.

Tivoli stock on Monday rose 75 cents a share, or 23%, to close at $4.06 in Nasdaq trading.