PowerComm Inc.

December 16, 2009 06:00 ET

Powell Industries Closes PowerComm Acquisition

EDMONTON, ALBERTA--(Marketwire - Dec. 16, 2009) - PowerComm Inc. (TSX:PCG) ("PowerComm" or the "Corporation"), following shareholder approval at the Annual and Special Meeting held on December 15, 2009, today announced the closing of the transaction with subsidiaries at Powell Industries Inc. (NASDAQ:POWL) (collectively, "Powell") of Houston, Texas effective December 15, 2009. The closing of the acquisition of PowerComm's business and assets operating in Kazakhstan is conditional upon obtaining regulatory approval from the Kazakhstan Government, which decision is expected to be received on or before March 31, 2010. Powell is acquiring substantially all of the assets of the Corporation and its affiliates for cash consideration of up to $33.5 million subject to adjustments, with $25.5 million payable on closing (including the Kazakhstan business and assets) and up to $8.0 million payable based on PowerComm achieving specified performance and earn-out thresholds for the 12 months ending March 31, 2010. Powell will also assume certain liabilities of PowerComm including bank debt, accounts payable and obligations under capital and other leases estimated to total approximately $ 22.5 million. Closing documentation was signed and delivered pending delivery of funds this morning. The funds payable on closing associated with the Kazakhstan business and assets will be paid at the closing of the Kazakhstan transaction. In addition, $3.0 million of the $25.5 million will be held in escrow for possible claims by Powell and will be releasable in stages over a period of 25 months.

Powell is a leading manufacturer of equipment and systems for the management and control of electrical energy and other critical processes.

"We are excited to be the organization Powell has chosen to grow their footprint in the Canadian marketplace," said Wayne Rutherford, President & Chief Executive Officer of PowerComm, "We valued this transaction as an opportunity for our employees to continue providing our existing services to our diverse customer base. The addition of Powell's product and service offering to what PowerComm had already provided in the past will create strong growth potential for the future," he continued.

"Our shareholders have been patient and PowerComm's goal was always to provide as much value to them as possible. We felt the timing of this transaction offered a reasonable return in relationship to the current economic conditions", Mr. Rutherford concluded.

Patrick L. McDonald, Chief Executive Officer of Powell, stated, " We are excited to have the PowerComm organization joining Powell and look forward to the opportunities that this provides us to work together to serve the Canadian market.

Reader Advisory

The news release contains certain forward-looking statements, including achieving specified performance and earn-out thresholds, and meeting certain representations, warranties and covenants in the Asset Purchase Agreements with Powell, that involve substantial known and unknown risks and uncertainties, certain of which are beyond the Corporation's control. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to the Corporation or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward- looking statements contained in this news release are made as of the date of this news release and the Corporation does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Contact Information

  • PowerComm Inc.
    Wayne R. Rutherford
    President and Chief Executive Officer
    PowerComm Inc.
    J.D. Snowdon
    Executive Vice President Corporate Services
    Email: info@powercomm.ca