Carmanah Completes Asset Sale to SPX Corporation
VICTORIA, British Columbia, Feb. 01, 2019 (GLOBE NEWSWIRE) — Carmanah Technologies Corporation (TSX:CMH) (the “Company” or “Carmanah”), announced today that it has completed the sale of a significant portion of the assets of the Company to SPX Corporation for USD $77.0 million, as previously announced on December 12, 2018 and as approved by Carmanah shareholders at a special meeting held on January 22, 2019. The assets sold include all of the issued and outstanding equity interests of each of Sabik Oy, Sabik Oü, Sabik Private Ltd., and Sabik Ltd., and their respective assets, the business and assets the Company’s Airfield Ground Lighting business, its Aviation Obstruction Lighting business as well as some miscellaneous business assets that support the businesses to be sold (the “Transaction”).
“We are pleased to have completed this important transaction and wish SPX Corporation and our former colleagues’ great success as they embark on an exciting future of growth and opportunity”, said John Simmons, CEO. “Equally, we look forward to focusing on the abundant prospects for growth and development in our retained businesses.”
The net cash proceeds of the Transaction after transaction costs and taxes is estimated to be approximately USD $73.5 million that, together with the Company’s projected cash balances of approximately USD $14.0 million, will result in total cash reserves of approximately USD $87.5 million. Company management and the board of directors of Carmanah have yet to fully consider how the Company will use the proceeds from the Transaction. Alternatives under consideration will include investments to grow the residual businesses of the Company by way of acquisitions or research and development spending, acquisitions of other businesses in new market spaces or returning cash to the shareholders by way of dividends or share buy-backs.
The Company continues to retain and operate the following 4 divisions: (i) Carmanah Traffic, which develops and sells traffic signaling devices including crosswalk and school zone warning systems, LED enhanced traffic signs, radar speed signs and miscellaneous traffic warning products; (ii) Sol, Inc., which develops and sells solar powered outdoor lighting for streets, parking lots and pathways; (iii) Carmanah Telematics, which designed, built and supplies solar powered, satellite connected asset tracking devices to its customer, a satellite operating company; and (iv) Sabik Offshore GmbH, which provides completely integrated safety and marking solutions from aids to navigation to aviation obstruction lighting for offshore wind farms (collectively the “Residual Businesses”). The Residual Businesses generated revenues in excess of USD $30 million in the trailing 12 months.
Alexander Capital Group Inc. of Toronto served as financial advisor to Carmanah and Borden Ladner Gervais acted as legal counsel.
About Carmanah Technologies Corporation
Carmanah designs, develops, and distributes a portfolio of products focused on energy optimized LED solutions for infrastructure. Since 1996, we have earned a global reputation for delivering durable, dependable, efficient, and cost-effective solutions for industrial applications that perform in some of the world’s harshest environments. We manage our business within two reportable segments: Signals and Illumination. The Signals segment serves the Offshore Wind, Traffic, and Telematics markets. The Illumination segment provides solar-powered LED outdoor lights for municipal and commercial customers.
Carmanah Technologies Corporation:
Evan Brown, (250) 380-0052
Chief Financial Officer/Corporate Secretary
This release may contain “forward-looking information” and “forward-looking statements” within the meaning of applicable Canadian securities legislation. All information contained herein that is not historical in nature may constitute forward-looking information. Often, but not always, forward-looking statements can be identified by the use of words such as “expects”, “estimates”, “could”, “will”, or variations of such words and phrases. Forward-looking statements herein include, but are not limited to, use of proceeds from the Transaction, and estimated revenues for the Residual Businesses in the trailing 12-months, and are based on management’s current expectations and assumptions that, while considered reasonable by management, are inherently subject to business, market and economic risks, uncertainties, and contingencies which may cause the actual results, performance, or achievements of Carmanah to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements.
These forward-looking statements are based on management’s current expectations and beliefs but given the uncertainties, assumptions and risks, readers are cautioned not to place undue reliance on such forward-looking statements or information. Carmanah disclaims any obligation to update, or to publicly announce, any such statements, events or developments except as required by law. Risk factors include, among others: risks related to certain conditions contemplated by the Agreement.
For additional information on these risks and uncertainties, see Carmanah’s most recently filed Annual Information Form (“AIF”) and Annual MD&A (“MD&A”), which are available on SEDAR at www.sedar.com and on the Company’s website at www.carmanah.com. The risk factors identified in the AIF and MD&A are not intended to represent a complete list of factors that could affect Carmanah. Accordingly, readers should not place undue reliance on forward-looking statements. Carmanah does not assume any obligation to update the forward-looking information contained in this press release, unless required by law.