NEW YORK (TheStreet) -- Revolution Lighting (RVLT - Get Report) surged at market open Monday on the announcement it had agreed to acquire Value Lighting and certain affiliates in a move to increase its distribution footprint.
Shares jumped 26.4% to $4.25 on the news.
Revolution said in a statement the acquisition will "drive new penetration into multifamily housing sector, accelerate company growth" and yield 2014 pro forma combined revenue of around $110 million. The company hopes increase its supply of light bulbs, lamps and fixtures, taking advantage of continuing strength in the construction of apartment buildings and condominiums.
The Stamford, Conn.-based business agreed to pay $35.6 million for Value Lighting with an additional $3.5 million in assumed debt. Around $7.5 million of the purchase will be paid in cash while the remainder will be in Revolution stock. Revolution will also receive at least $9 million in working capital.
Up to $10 million in milestone payments will be made to Value Lighting equity holders if 2014 and 2015 revenue and EBITDA targets are achieved.
"This is an exciting and highly complementary acquisition that will allow Revolution Lighting to penetrate new markets, including the fast-growing multifamily residential housing sector, and further accelerate our overall growth as a company," said Revolution CEO Robert LaPenta in a statement.
"Value Lighting's existing and new build customers are seeking to expand into LED lighting solutions and will provide a new and significant distribution channel for our company."
Value Lighting had revenue of $43 million in 2013 and expects to grow sales nearly 28% to $55 million over 2014. More than half of expected 2014 revenue is in current backlog.
The acquisition has yet to pass regulatory approval.