Carmanah Technologies Announces Acquisition of Spot Devices including License of SIMA System
Victoria, British Columbia CANADA, November 15, 2012 /FSC/ - Carmanah Technologies Corporation (CMH - TSX), announced today a definitive agreement to acquire the assets of Spot Devices, Inc., ("Spot Devices") a Nevada, USA-based manufacturer of pedestrian and school zone safety systems. Spot Devices is a market leader in the traffic signaling industry and, together with Cirrus Systems, LLC, a related company, an innovator of System Infrastructure Management Application ("SIMA") technology. Included in the transaction is a license agreement for the exclusive use of SIMA for public roadway applications. The acquisition gains Carmanah dominant market share in the crosswalk and school zone arena, offers a significant pipeline of both AC and solar-powered signaling products, and delivers a high value remote management capability unique in the industry.
Under the terms of the definitive agreements, Carmanah will:
* Acquire selected assets of Spot Devices, including traffic products for public roadways and technology rights and inventory and equipment, established pipeline and revenue stream;
* Under license from Cirrus Systems, LLC, gain worldwide, royalty-free right to the SIMA software platform, firmware license, trademark and appointment of the software for an initial six-year term and renewable thereafter.
Terms of the transaction include the issuance of 2.2 million Carmanah shares to Spot Devices at a value of $0.45 CAD per share(approximately $1 million CAD) plus conditional cash payments pursuant to a two-year cash earn-out where Spot Devices is paid 12.5% of any revenues in excess of agreed amounts.
All elements of the transaction remain subject to approval of the TSX. The acquisition of the Spot Devices assets and license of the SIMA platform are both expected to close by early December 2012 but no later than January 4th, 2013. Carmanah and Spot Devices have agreed to form a Traffic Signaling Advisory Committee to ensure an orderly transition of the businesses as well as guide strategic growth. The Chief Executive Officers of both companies, Carmanah and Spot Devices, amongst others, are members of the Committee.
"Carmanah's decision to re-engage in the traffic business early this year made this strategic acquisition opportunity well-timed." Bruce Cousins, Carmanah CEO, comments. "With the launch of the Carmanah solar-powered RRFB [Rectangular Rapid Flashing Beacon] in June, combined with Spot Devices' arguable leadership in the RRFB space and the company's pipeline for AC and solar-powered products, Carmanah is in a powerful position as market share leader in the crosswalk and school zone warning system space. We believe that this transaction and access to the SIMA platform are immediately accretive and will provide an important source of future growth for our business, as we answer the need for online, remote system control."
"Spot Devices looks forward to contributing its hardware and software capabilities to the Carmanah brand," said Dean McKay, CEO of Spot Devices. "The combination of our offerings will provide customers with a suite of best-of-breed products unrivaled in the pedestrian traffic safety industry. Furthermore, through the integration of the SIMA platform with Carmanah's traffic products our customers will receive seamless customer service and support."
About Carmanah Technologies Corporation
As one of the most trusted names in solar technology, Carmanah has earned a reputation for delivering strong and effective products for transportation applications worldwide. Industry proven to perform reliably in some of the world's harshest environments, Carmanah solar LED lights and solar power systems provide a durable, dependable and cost effective energy alternative. Carmanah is a publicly traded company, with common shares listed on the Toronto Stock Exchange under the symbol "CMH". For more information, visit carmanah.com.
About Spot Devices
With a reputation for quality products and excellent customer service, Spot Devices has been helping pedestrians and motorists arrive safely since 2004. Known for its bright crosswalk, school zone and traffic safety systems, Spot Devices streamlines maintenance by allowing customers to remotely manage and monitor equipment from any web-enabled device using the System Infrastructure Management Application or SIMA. Spot Devices is based in Sparks, Nevada and is a privately held company. For more information, visit spotdevices.com.
About Cirrus Systems, LLC
Cirrus Systems helps customers achieve their productivity and performance goals by connecting devices, data and people in the cloud - generating enterprise-wide management capabilities and creating value through improved decision making. Building on a proven platform that employs standards-based protocols, Cirrus Systems designs, builds and scales an array of systems providing businesses with vital information that is on time, and on demand. Cirrus Systems, LLC is a private company headquartered in Sparks, Nevada. For more information, visit cirrussystemsllc.com.
Carmanah Technologies Corporation
Roland Sartorius, Chief Financial Officer
For further information:
Investor Relations: Roland Sartorius (CFO)
Public Relations: David Davies
This news release contains "forward-looking statements" or "forward-looking information" within the meaning of applicable securities laws (collectively, "forward-looking statements"). Forward-looking statements are generally identifiable by use of the words "believes," "may," "plans," "will," "anticipates," "intends," "budgets," "could," "estimates," "expects," "forecasts," "projects" and similar expressions, and the negative of such expressions. Forward-looking statements in this news release include statements about the definitive agreement to acquire assets of Spot Devices, including a license agreement for the exclusive use of SIMA for all Pedestrian Traffic Applications; the traffic signaling market position of Carmanah upon completion of the acquisition; the scope and potential pipeline of AC and solar-powered signaling products; the value of remote management; the SIMA platform providing future growth of Carmanah's business; Carmanah's strategy, future operations, prospects and the plans of management; extending existing product lines through internal development efforts, strategic business relationships as well as focused acquisitions.
With respect to the forward-looking statements contained in this news release, Carmanah has made numerous assumptions regarding, among other things, that Carmanah will be able to close on the asset acquisition and licensing terms contemplated in the definitive agreement with Spot Devices; and Carmanah's market position and future prospects following completion of the transactions contemplated in the definitive agreement with Spot Devices. While Carmanah considers these assumptions to be reasonable, these assumptions are inherently subject to significant business, economic, competitive, market and social uncertainties and contingencies.
Additionally, there are known and unknown risk factors which could cause Carmanah's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements contained herein. Known risk factors include, among others: the acquisition of the Spot Devices assets and licenses may not be completed in the timeframe contemplated, or on the terms currently contemplated, or at all; the Spot Devices assets may not provide benefits to Carmanah's business as currently anticipated; the installation of Spot Devices assets may not be completed in the timeframe currently contemplated; a license agreement for the exclusive use of SIMA for all Pedestrian Traffic Application may not be commercially beneficial to Carmanah as currently anticipated, or at all; Carmanah's market position in the traffic signaling segment may not be augmented as currently anticipated upon the acquisition of the Spot Devices assets and the SIMA licensing agreement; Carmanah may not realize any significant pipeline of AC and solar-powered signaling products; remote management capability may not be unique in the industry and may not be beneficial to Carmanah's business going forward; access to the SIMA platform may not provide any future growth to Carmanah's business; general risks related to the competitive environment; competition with other energy sources; technological changes; anticipated adoption rates for traffic signaling products and remote monitoring capabilities; ability to manage expansion effectively; foreign exchange; reliance on third party manufacturers; reliance on outside agents and distributors; reliance on key employees; intellectual property risks; environmental and regulatory compliance; government contracts and subsidies; product quality and reliability and warranty liability risk; downturn in economic and market conditions; liquidity and capital requirements; litigation risk; potential reorganization of operations or product offerings; geopolitical and other global or local events; there can be no assurances that the Company can increase or maintain current top line revenue; there can be no assurances that the Company will achieve additional product sales; and there can be no assurances the Company can extend existing product lines through internal development efforts, strategic business relationships and focused acquisitions.
A more complete discussion of the risks and uncertainties facing Carmanah appears in Carmanah's most recently filed Annual Information Form, Annual MD&A, and other continuous disclosure filings which are available on SEDAR at www.sedar.com and on the Company's website at Carmanah disclaims any obligation to revise or update any such forward-looking statements or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future results, events or developments, except as required by law.