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news release:
AMSC Completes Acquisition of Power Quality
Systems, Inc.
Westborough, MA, 1 May 2007:
American Superconductor
Corporation (NASDAQ:
AMSC), a leading energy technologies company, announced today that it has
completed its previously announced acquisition of Power Quality Systems, Inc. (PQS)
in an all-stock transaction valued at approximately $4.0 million, or
approximately 1.3 times PQS sales for calendar year 2006, based on AMSC's
closing stock price on April 27, 2007. Located in Pennsylvania, PQS offers
reactive compensation products known as Static VAR Compensators, or "SVCs,"
based on its proprietary thyristor switch technology. These products enhance the
reliability of power transmission and distribution grids and greatly improve the
quality of power for manufacturing operations. PQS has been integrated into
AMSC's Power Systems business unit.
"The field-proven thyristor switch technology we
obtained in this acquisition will save us time and millions of dollars in
development costs for a technology that will enhance our reactive compensation
product offerings and increase sales to power grid operators and industrial
concerns worldwide," said Greg Yurek, founder and CEO of AMSC. "Combining PQS's
proprietary thyristor switch technology with AMSC's proprietary controls
technology produces a truly powerful new SVC product offering. We are now
quoting our SVCs to power grid operators, and we expect this to lead to new
sales this fiscal year while also building backlog for next fiscal year and
beyond."
Thyristor switches are the heart of many power
electronic-based reactive compensation products, including SVC systems. These
systems are used to regulate and stabilize power grid voltage, which increases
grid reliability and allows more power to be transmitted over existing power
transmission lines. Utilizing the proprietary thyristor switch, AMSC expects to
offer improved SVC systems that not only have a lower initial cost, but also
lower energy and maintenance costs and a smaller footprint when compared with
conventional products.
Power Quality Systems has an installed base of
more than 60 standard SVC systems with ratings of up to 28 megaVAR (MVAR) in
North American utility grids and industrial sites. AMSC will expand the reach of
PQS's standard SVC product line globally while also offering higher level SVCs
along with AMSC's D-VAR(R) and PowerModule(TM) product offerings.
For the 12 months ended December 31, 2006, PQS's
unaudited financial results include revenues of approximately $3 million and a
net loss of approximately $400,000. This compares with revenues of approximately
$1.2 million and a net loss of approximately $900,000 the prior year. The
unaudited backlog for PQS at the time of closing is estimated at over $1
million. AMSC expects to increase sales of PQS's current product line by
approximately 67% to $5 million for the fiscal year ending March 31, 2008. AMSC
is not assuming any long-term debt in the transaction, and it expects the
acquisition to be immediately accretive to earnings before interest, taxes,
depreciation, amortization and stock-based compensation (EBITDAS).
Terms & Conditions
AMSC purchased PQS for approximately $4.0 million
worth of stock. The shares are subject to a lockup agreement whereby the current
owners of PQS may sell only a certain number of shares per year through March
2009. While the current owners are financial participants only and will not be
employed by AMSC subsequent to the acquisition, all key PQS engineering
personnel are expected to remain with the company. The all-stock transaction
also includes an earn-out opportunity with the potential for up to an additional
475,000 shares of AMSC common stock to be issued to PQS's current owners based
on the achievement of certain order growth targets for existing PQS products for
the fiscal years ending March 2008 and 2009.
About AMSC
AMSC (American Superconductor Corporation -
NASDAQ: AMSC) is a leading energy technologies company. The company develops and
sells a wide range of products and solutions based on power electronic systems
and high temperature superconductor (HTS) wires that dramatically improve the
efficiency, reliability and quality of electricity during its generation,
transmission, distribution and use. The company is a dominant force in
alternative energy, offering grid interconnection solutions as well as licensed
wind energy designs and electrical systems. As the world's principal supplier of
HTS wire, AMSC is enabling a new generation of compact, high-power electrical
products, including motors, generators, power cables, grid-level surge
protectors, and advanced transportation and defense systems. AMSC also provides
utility and industrial customers worldwide with voltage regulation systems that
dramatically enhance power grid capacity, reliability and security, as well as
industrial productivity. The company's technologies are protected by a broad and
deep intellectual property portfolio consisting of hundreds of patents and
licenses worldwide. More information is available at www.amsuper.com .
American Superconductor and design,
Revolutionizing the Way the World Uses Electricity, AMSC, Powered by AMSC,
SuperVAR, D-VAR, DVC, PQ-IVR, PowerModule and Windtec are trademarks or
registered trademarks of AMSC.
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