Capstone Turbine Corporation (Nasdaq:CPST), a US manufacturer of microturbine energy systems, has acquired a main product line from one of its competitors Calnetix Power Solutions, Inc. (CPS).
The all-stock deal fills a niche in Capstone’s product line and expands its distribution network.
Capstone acquired all of the rights and assets related to the manufacture and sale of the CPS TA100 100kW microturbine generator including intellectual property, designs, tooling, drawings, patents, know-how, distribution agreements and supply agreements.
Capstone issued CPS
(www.calnetixps.com) approximately 1.6 million shares of common stock with an
additional number of shares to be issued six months after the closing
date. Capstone shares were trading at around $1.20 per share on February 10.
CPS will continue to manufacture the TA100 turbines for Capstone from existing CPS TA100 backlog and selected new orders received. CPS had approximately $7.5 million in product and aftermarket parts backlog at the time of closing.
"The CPS TA100 microturbine is most similar to the Capstone product design as compared to other products in the industry and the 100kW rating fits nicely between our 65kW and 200kW product offerings," stated Darren Jamison, Capstone’s President and CEO. "By acquiring the CPS TA100 product we not only strengthen Capstone’s suite of microturbine products but also add approximately 24 more distributors and business partners bringing Capstone’s total number of distributors and partners to over 90 worldwide," added Jamison. "Our goal continues to be to develop and strengthen our distribution channels worldwide and to grow each distribution partner to approximately $3 to $5 million in annual Capstone sales."
"The acquisition of CPS’s TA100 not only broadens Capstone’s product line and distribution channel but also brings Capstone 26 additional technology patents to our 98 U.S. patents," stated Mark Gilbreth, Capstone’s Executive Vice President of Operations and Chief Technology Officer. "In particular the CPS stand-alone recuperator and combustion designs are of interest to Capstone as we look to provide lower cost, smaller footprint, low emission solutions in the hybrid electrical vehicle markets," added Gilbreth.
In June of 2009, UK firm Langford Performance Engineering converted a Ford (NYSE: F) S-Max people carrier into a hybrid plug-in, using Capstone’s C30 liquid fueled microturbine.
"It was critical that this acquisition be structured in such a way as to positively impact Capstone’s cash position and not impact our ability to manufacture our current product backlog," said Edward Reich, Capstone Executive Vice President and Chief Financial Officer. "As structured, I look for this acquisition to have a positive impact on revenue, backlog and cash in the current quarter and beyond," added Reich.
Capstone and CPS also entered into a three-year OEM agreement under which CPS will supply its new, innovative, 125kW waste heat recovery generator system. In exchange for certain minimum purchase requirements, Capstone will have exclusive rights to sell the zero emission waste heat generator for all microturbine applications and for applications below 500kW where the source of heat is the exhaust of a reciprocating engine used in a landfill application.
"The 125kW waste heat recovery generator can be directly fired by the exhaust of six Capstone C65’s or two Capstone C200’s to provide over 500kW of clean and efficient green power when an end use customer has no other economic use for the thermal energy," said Jim Crouse, Capstone’s Executive Vice President of Sales and Marketing. "The ability to harness 125kW of additional exhaust driven electricity will add over 7% to the total system efficiency of our current products and make Capstone even more competitive in the landfill, digester and other markets," added Crouse.
"CPS is extremely pleased to enter this long term strategic relationship with Capstone and to move from a competitive relationship to a collaborative relationship. By doing so we will leverage the combined companies’ microturbine and waste heat recovery technologies," stated Brad Garner President of CPS.
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