SatCon Acquires Ling Electronics as Part of Strategic Alliance
26 October 1999
SatCon Acquires Ling Electronics as Part of Strategic Alliance
CAMBRIDGE, Mass.--Oct. 25, 1999--SatCon Technology Corporation(R) (Nasdaq NM:SATC), has announced that it acquired Ling Electronics, Inc. and Ling Electronics, Ltd. from Mechanical Technology, Inc. SatCon issued 1,800,000 shares of common stock to Mechanical Technology, Inc. in exchange for Ling Electronics, $7,000,000 in cash, and 100,000 warrants to purchase Mechanical Technology stock. SatCon valued Ling Electronics to be worth approximately $10 - $15 million based on a one times revenue basis. In addition, Mechanical Technology also received warrants to purchase an additional 100,000 shares of SatCon's common stock."This is a significant milestone for us," said David Eisenhaure, SatCon's President and Chief Executive Officer. "We've acquired a company at a very reasonable price and established a major alliance with Mechanical Technology, an important player in the power and energy management market. We've looked into other power electronics companies that were selling for one and a half times revenues and we think we made a good deal for SatCon at this one times revenue price. We believe that the acquisition of Ling will also enhance our ability to manufacture our power inverters in production quantities, while providing us with additional near-term revenue, which we believe will be accretive to next year's earnings. In addition, Ling's product base can also be sold into the distributed power and energy management market, the precision industrial automation market, and electric and hybrid electric vehicle markets where SatCon has established significant customer relationships. The infusion of this additional working capital will also allow us to accelerate our growth and manufacturing capability more rapidly."
Ling Electronics, in Anaheim, CA, is a leading manufacturer of test equipment and power products, including vibration test systems, power converters and controllers, amplifiers and digital control systems. Ling's revenues have been $10 - $15 million annually. The SatCon and Ling combination will also provide several other beneficial synergies such as establishing a SatCon West Coast presence near such customers as Applied Materials and Haas Automation and increased sales and distribution channels for SatCon products. SatCon can increase product margins at Ling by having Magmotor become the supplier of some of the mechanical components that are now purchased out of house, with FMI becoming the supplier of some of the purchased electronics. Ling will work with the Tech Center and FMI in readying SatCon's power electronics modules for full production. Ling will also concentrate on expanding its current market position within its product lines by introducing product upgrades based on some SatCon technology infusion.
SatCon Technology Corporation(R) manufactures and sells power and energy management products for telecommunications, silicon wafer manufacturing, factory automation, aircraft, satellites and automotive applications. SatCon has four divisions: Film Microelectronics, Inc. designs and manufactures microelectronic circuits and interconnect products; Magmotor manufactures motors and magnetic suspension systems; Beacon Power manufactures flywheel energy storage devices; and the Technology Center is responsible for new technology and product development.
Note: This release contains forward-looking statements that involve a number of risks and uncertainties. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects," "intends" and similar expressions are intended to identify forward-looking statements. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are set forth under the caption "Factors Affecting Future Results" in the Company's Annual Report on Form 10-K for the year ended September 30, 1998, which factors are incorporated herein by reference. Please note that the Company's future growth opportunities are dependent on the introduction of new products that must penetrate commercial market segments. No assurance can be given that new products can be developed, or if developed, will be successful; that competitors will not force prices to an unacceptably low level or take market share from the Company; or that the Company can achieve or maintain profits in these markets.