Unique Mobility, Inc. Issues Letter of Intent To Acquire Franklin Manufacturing Company
30 March 1998
Unique Mobility, Inc. Issues Letter of Intent To Acquire Franklin Manufacturing Company
Concurrently Completes $5 Million Private Placement
GOLDEN, Colo., March 30 -- Unique Mobility, Inc. (Amex: UQM),
a leading worldwide developer and manufacturer of energy efficient electric
and hybrid electric power motor systems, today announced that it has issued a
letter of intent to acquire Franklin Manufacturing Company, a St. Charles,
Missouri, privately-held manufacturer and distributor of electronic components
and assemblies for the automotive, medical, telecommunications, and industrial
markets. Franklin was profitable on revenues of approximately $10 million for
its fiscal year ended September 30, 1997. The transaction is valued at
$9 million, including the assumption of up to $3.5 million of Franklin's
liabilities and debt. The acquisition price is payable $4.0 million in cash
with the remainder in shares of Unique Mobility common stock. The transaction
is expected to close during the quarter ended June 30, 1998. The completion
of the acquisition is subject to numerous conditions including completion of
due diligence and negotiation and execution of a definitive agreement.
The proposed acquisition of Franklin Manufacturing Company represents
another step in the growth of Unique's manufacturing capability. Franklin
will be used to manufacture UQM(R) motor controllers and related electronic
products. Unique's product engineering expertise will be used to expand
Franklin's product line and customer service capability. Franklin is housed
in a modern 50,000 sq. ft. facility where it conducts both its manufacturing
operations and its electronic component distribution businesses. The primary
selling shareholder, Michael Franklin, will hold the dual positions of
President of Franklin and Vice-President of Electronics Manufacturing at
Unique.
Separately, Unique announced the completion of a $5 million offering of
626,875 units of its securities, at $8.00 per unit, under Regulation D of the
Securities and Exchange Act. Under the terms of the offering, each unit
consisted of one share of common stock and one warrant to purchase one share
of common stock at $8.00 for a period of 24 months from the date of the
offering.
The warrants may be called after 12 months from the date of the offering
if the closing price of the stock on the Amex has been $16.00 or more for a
period of 20 days. Net proceeds to the Company from the offering were
$4,732,460. The offering was placed with institutional and accredited
individual investors in Europe and the United States. The Millennium
Financial Group, Inc. and Shemano Group, Inc. were the placement agents for
the offering. The placement agents received placement agent fees of $282,540
and warrants to purchase 176,588 shares of the Company's common stock at $8.00
per share for a period of 24 months from the date of the offering.
In commenting on these events, Ray A. Geddes, Chairman and CEO, said, "The
acquisition of Franklin represents a major step forward in our ability to
respond to a broad range of commercial market opportunities. We are very
pleased to have identified this high quality, low-cost electronics
manufacturer through which we can bring our state-of-the-art controllers to
market. The synergies between Franklin and Unique also include the
opportunity to expand Franklin's customer services through Unique's
engineering expertise." Mr. Geddes concluded, "We also look forward to having
its founder, Michael Franklin, join our senior management team. His
experience will be a most valuable addition."
In commenting on the transactions, Donald A. French, Chief Financial
Officer, said, "The Franklin acquisition, together with the acquisition of
Aerocom Industries completed earlier this quarter, will fuel significant
growth in product sales revenues." Mr. French added, "We also are pleased to
add the additional quality institutional shareholders who participated in the
private placement financing for the Franklin transaction to our shareholder
base."
Unique Mobility, Inc. is an innovative developer and manufacturer of power
dense, high efficiency motor systems for propulsion applications. Its
technology is value-added to a wide range of markets, including the
industrial, agricultural, healthcare, mining, aerospace, oil and gas equipment
and emerging light electric vehicle and hybrid electric bus, truck and car
markets.
This release may contain forward-looking statements that involve risks and
uncertainties. These statements may differ materially from actual future
events or results. Readers are referred to the Risk Factors section of the
Registration Statement on Form S-3 (File No. 333-44597) filed by Unique with
the SEC, which identifies important risk factors that could cause actual
results to differ from those contained in the forward-looking statements,
including Unique's history of operating losses, its ability to obtain
additional financing, competition, changes in government regulations mandating
low and zero emission vehicles, Unique's ability to protect its proprietary
information, and Unique's limited experience in manufacturing processes and
procedures and marketing and distribution.
SOURCE Unique Mobility, Inc.