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New
Release -- Superconductor Week does not edit or endorse the following
news release: American
Superconductor to Acquire Windtec(TM)
Westborough, MA, November 29:
American Superconductor
Corporation (Nasdaq:AMSC),
a leading energy technologies company, announced today it has signed a
definitive agreement to acquire Windtec, a private company based in Klagenfurt,
Austria that develops and licenses proprietary wind turbine system designs, and
sells wind turbine electrical systems. The transaction's closing is expected in
January 2007.
"Wind power is one of the most dynamic markets in electrical
energy today, and virtually all industry experts predict that it will play an
increasingly important role in powering the world's homes and businesses," said
Greg Yurek, chief executive officer and founder of American Superconductor.
"According to the Global Wind Energy Council, the installed base of wind
generated electricity worldwide is expected to double from approximately 59,000
megawatts in 2005 to nearly 135,000 megawatts in 2010. We believe this
acquisition will strongly enhance AMSC's revenue growth in the wind energy
market and speed the time to achieving overall corporate profitability."
The Windtec purchase price is 1.3 million shares of AMSC
common stock, valued at approximately $12.4 million based on yesterday's closing
price. The AMSC shares to be issued at the closing are subject to a lockup
whereby the sole owner and founder of Windtec, Gerald Hehenberger, may sell only
a certain number of shares per year through January 2010.
The all-stock transaction, which is subject to the terms and
conditions of the stock purchase agreement, also includes an earn-out
opportunity with the potential for another 1.4 million shares of AMSC common
stock to be issued to Mr. Hehenberger based on the achievement of certain
revenue growth targets for the fiscal years ending March 31, 2008 through March
31, 2011. Mr. Hehenberger, a 20-year wind industry veteran, will remain with the
company as Vice President and Managing Director of Windtec. The transaction
includes the acquisition of Mr. Hehenberger's 27 patents and patents pending
worldwide on wind turbine technology.
For the 12 months ending December 31, 2006, AMSC expects
Windtec's revenues to be approximately $13 million and its net income to be at
least eight percent of revenues, or $1 million. This is up significantly from
$2.7 million in revenues and a break-even bottom line for full year 2005.
Windtec currently has more than $20 million in backlog that AMSC expects to
recognize as revenues in its fiscal year ending March 31, 2008 with higher
profit margins than in calendar 2006. After closing, Windtec will be a wholly
owned subsidiary of American Superconductor. Its financial results will be
reported as part of AMSC's Power Electronic Systems business unit.
Based on existing backlogs and forecasts, AMSC expects Power
Electronic Systems revenues, with the inclusion of Windtec, to more than double
from approximately $22.5 million in fiscal 2007 to approximately $50 million for
the fiscal year ending March 31, 2008. AMSC is not assuming any debt in the
transaction, and it expects the acquisition to be accretive to earnings
beginning in its first full quarter of operations as an AMSC subsidiary.
Windtec designs a wide variety of wind turbine systems from
the ground up, and in certain cases licenses these designs to third parties for
an upfront fee and royalty payments for each installation of a Windtec-designed
wind turbine system. Windtec also provides consulting services for its licensees
who want to upgrade or optimize their wind turbine systems. Licensees normally
purchase the wind turbine electrical systems from Windtec, which utilize AMSC's
PowerModule systems to control power flows. Windtec's customers and targeted
markets include industrial equipment manufacturers and engineering construction
companies in countries such as Canada, China, the Czech Republic, Germany and
India, who are addressing an unmet need for local manufacturers of wind turbine
systems.
"During the past 18 months, Windtec has become the primary
channel for PowerModule sales in China, and we expect that will soon expand to
additional markets," Yurek said. "The close working relationship between Windtec
and AMSC has made it clear that many sales and technical synergies exist between
us in power electronics, electrical systems, wind farm grid interconnection
solutions, and rotating electrical machines, such as wind energy generators.
This acquisition will allow us to leverage our mutual capabilities and to also
optimize our sales forces, field service teams and planned manufacturing
operations in the Asia-Pacific region."
"Windtec is capitalizing on a vast unmet need in the market,"
said Chuck Stankiewicz, Senior Vice President of AMSC Power Systems. "The
company's wind turbine designs, including its new SuperGear(TM) technology,
differentiate it from competing technologies. Its engineering services are in
high demand and its licensing arrangements are unique. These capabilities
provide us with a competitive advantage, particularly in emerging countries
where local content is often government-mandated."
AMSC plans to retain Windtec's operations in Austria and its
staff of approximately 35 employees, including Mr. Hehenberger, the company's
founder, who will continue to lead Windtec's global business development and
sales efforts. "Demand
for alternative sources of energy continues to build rapidly and, thanks to our
unique offerings, Windtec's growth has far outpaced the industry average," Mr.
Hehenberger said. "We expect this growth will continue in the years ahead given
our combined offerings and expertise. We are very excited to join the AMSC team
and look forward to contributing to the company's success."
American Superconductor also announced today that it has
received a new order from Windtec for PowerModule systems to be used to control
power flow in 165 additional wind turbines in China. With this order, AMSC's
PowerModule systems will be powering 785 Chinese wind turbine systems and
approximately 1,200 megawatts of China's wind generated electricity.
To learn more about Windtec and its products and solutions,
please visit
http://www.amsuper.com/products/applications/windEnergy/
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