Carmanah Technologies Corporation (Vancouver:CMH.V) has acquired all the issued and outstanding shares of Soltek Powersource Ltd., a manufacturer/supplier of solar power systems for industrial, government, residential and retail applications. This acquisition joins two complementary companies — Carmanah with its self-contained solar packages and proprietary LED technology, and SPS with its large-scale solar power systems — to form a new company capable of providing solar products internationally.
The solar industry grew by an unprecedented 62% in 2004 to $6.5 billion, and is predicted to grow 300% to $18.5 billion by 2010.
Carmanah anticipates that a new range of solar/LED general illumination products will be developed, including security lighting, street lighting and sign lighting, for applications in all the markets the Company currently serves. An entirely new product line of standardized “plug-and-play” solar power sources will also be possible, which would capitalize on SPS’s existing range of “solar engines” and Carmanah’s world-leading energy management technology.
Carmanah acquired SPS for $12 million. Subject to closing adjustments for working capital, $6 million was paid in cash from existing funds and $4 million equivalent in common shares at $2.66 per share. An additional contingent payment of up to $2 million worth of common shares at $2.66 may also be payable if SPS reaches specified revenue targets (prorated between $9 million and $12 million) and an EBITDA in excess of 5.5% of revenue for the six-month period ending December 31, 2005.
Principal vendors will be issued 300,000 performance warrants with an exercise price of $2.79 (being the weighted average trading price on the closing date of June 30, 2005, conditional upon SPS reaching increased revenue targets (prorated between $12 million and $14 million) and an EBITDA in excess of 5.5% of revenue for the six months ending December 31, 2005. The shares issued to the principal vendors will be held in a pooling agreement providing for the pro rata release of the shares over a two-year period after closing.
www.spsenergy.com
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