SatCon Technology Acquires Power Electronics Products
17 November 1999
SatCon Technology Corporation Makes Strategic Acquisition of the Power Electronics Products Business Unit From Northrop Grumman Corporation
CAMBRIDGE, Mass.--Nov. 17, 1999--SatCon Technology Corporation(R) , today announced the acquisition of the power electronics products business unit from Northrop Grumman Corporation . The business unit, previously the Electric Vehicle Group of Westinghouse Electric Corporation, produces power electronics, controllers, and motors for electric and hybrid vehicle powertrains, micro-turbine power generation, and energy storage products. Their customers include, among others, DaimlerChrysler Corp., Troy Design & Manufacturing Corp. (for Ford Motor Company), AlliedSignal, the U.S. Department of Energy, and U.S. Department of Transportation.In addition to Northrop Grumman's power electronics product base, SatCon receives extensive intellectual property including all product development and designs and almost 30 patents for several power electronics products and system designs providing SatCon with significant revenue potential and an enhanced competitive position in power electronics. SatCon will also receive all current backlog of product orders and development contracts. SatCon anticipates this will be accretive to earnings this year. In exchange, Northrop Grumman receives approximately 570,000 shares of SatCon common stock and warrants to purchase an additional 200,000 shares of SatCon's common stock in the future.
"Through a Memorandum of Understanding (MOU), Northrop Grumman made this an attractive opportunity for us," said David Eisenhaure, SatCon's President and Chief Executive Officer. "Not only did we manage to acquire great technology and products, and a recognized power electronics design team, we also secured a favorable position for future work with Northrop Grumman. As part of this acquisition, SatCon will be listed as a preferred supplier to Northrop. In addition, SatCon and Northrop will form a joint oversight committee to identify business opportunities within Northrop Grumman that could benefit both Northrop Grumman and SatCon."
"While providing transportation and energy-related customers with outstanding innovation, technologies, and products, the power electronics products unit is simply going in a different direction from our core business," said Kelly C. Overman, Vice-President and General Manager of Systems Development and Technology at Northrop Grumman's Electronic Sensors and Systems Sector. "The divestiture will enable this unit to efficiently pursue its vision, while we continue to focus our resources on our core competencies in electronic sensors and systems. Our MOU assures Northrop Grumman access to SatCon's outstanding power electronics, energy storage, and motor control capabilities in support of our own products and systems."
"This is a significant strategic acquisition in our path to leadership in power electronics for distributed power and transportation," continued Eisenhaure. "Northrop Grumman's power electronics products business unit will help make SatCon the world leader in electronics for distributed power. Distributed on-site power generation is a new revolution in providing cleaner, more reliable, and lower cost power to homes and businesses. By installing on-site power generation systems, we can free ourselves from the utility grid and all of its inherent problems, including a growing number of brownouts, blackouts and environmentally hazardous power plants. These are hundred million dollar markets right now, but we expect them to be billion dollar markets as this new revolution in power generation continues to grow. These same electronics are at the heart of electric and hybrid automobiles as well. Their products include a 100 hp powertrain installed in Chrysler's EPIC Minivans, a 235 hp powertrain used in the Cedar Rapids Electric Transportation Consortium and several micro-turbine power generation systems for distributed on-site power generation. Combined, the hybrid automotive and distributed power markets present significant opportunities for SatCon's power electronics products."
"The electronics products business unit provided hundreds of powertrains that are used in DaimlerChrysler's EPIC Minivan, which have successfully proven themselves on the road today," concluded Eisenhaure. "This will be a great benefit to SatCon in its Advanced Integrated Power Modules Program with the Department of Energy for electric and fuel cell vehicle power inverters. Combining their hybrid electric vehicle products and micro-turbine power generation systems fits nicely with SatCon's strategy to be the leading supplier of power inverters for fuel cell vehicles and remote on-site fuel cell power generation systems."
SatCon Technology Corporation manufactures and sells power and energy management products for telecommunications, silicon wafer manufacturing, factory automation, aircraft, satellites and automotive applications. SatCon has four operating 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.
Statements made in this document that are not historical facts or which apply prospectively are forward-looking statements that involve risks and uncertainties. It is important to note that the Company's actual circumstances could differ materially from those implied by such forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company's filings, including but not limited to the 10-K and 10-Q. Copies of those filings are available from the Company and the SEC.