SOURCE: National Automation Services, Inc.

April 22, 2008 07:00 ET

National Automation Services, Inc. Announces Its Third Acquisition as Part of Its National Expansion Program

Southern California-Based Automation Controls Company Agrees to Be Acquired for $10.5 Million; Acquisition to Add Projected Gross Revenues of $12 Million and Projected EBITDA of Over $4 Million in 2008 and Assets Totalling Over $9 Million

LAS VEGAS, NV--(Marketwire - April 22, 2008) - National Automation Services, Inc. (PINKSHEETS: NASV) ( is pleased to announce that its has reached an agreement to purchase a Southern California-based automation controls company which specializes in the design, development, sale and installation of continuous motion control equipment for Fortune 500 companies and other national clients. Based upon a non-disclosure agreement signed by both parties, the name of the company will be withheld and announced at the time of closing, which is anticipated to occur no later than May 31, 2008.

The company being acquired will substantially increase the market presence of NAS, and is NAS's largest acquisition made to date. The company has been in business for over 14 years, and has an established reputation in the industry as the leader in continuous flow automation equipment, which allows a client to reduce costs through implementation of manufacturing processes that are in one continuous flow as opposed to breaking the manufacturing process into a number of different segments.

As part of this 100 % stock purchase, NAS will acquire $2.7 million in cash, $1.7 million of billed receivables and over $3 million of immediate billings due to work in progress, with substantially all direct expenses related to such billings already paid by the company, so much of this revenue will drop to consolidated profits of NAS. NAS will acquire no short-term or long-term debt other than trade payables incurred through the normal course of business. The company has posted record earnings within the first four months of operations in 2008, and financial results for the first six months of operations in 2008 are anticipated at $6 million of gross revenues and $2 million of EBITDA, with much of the EBITDA dropping to consolidated profits of NAS. The Company is currently estimated to recognize $12 million of gross revenues in 2008, with an EBITDA of over $4 million for the full fiscal year of operations.

Total cash consideration of $10.5 million will be paid for the acquisition. With current assets exceeding $4.4 million, NAS calculated the net purchase price as $6.1 million which is approximately 3.38 times historical average EBITDA. NAS is also acquiring a company that has a proven history of profitable operations with an estimated backlog of over $6 million for the annum period and beyond. The company is debt-free except for normal payables associated with work in progress for cash consideration of $10.5 million. NAS expects to retain the three senior managers who have been responsible for the day to day activities at the Company, therefore providing an easy transition in the change of ownership. As part of the purchase price, the founder of the Company has agreed to consult with NAS for a 90-day transition period.

Robert Chance, CEO of National Automation Services, Inc., in announcing the acquisition, stated: "We are very excited about the opportunity that our latest acquisition brings to our Company in our continuing effort to build a nationwide network of Automation and Controls Companies. This acquisition will not only more than double the size of the consolidated group to an estimated $22 million of gross revenues in 2008, thus making it a qualifying event to allow us entry onto the NASDAQ or AMEX, but it also brings highly specialized expertise in continuous motion automation that will allow our other subsidiaries to market such expertise in their geographic areas. This Company serves many Fortune 500 companies in many different markets.

"Furthermore, we will use this new base of operations in Southern California to market the expertise of NAS in such areas as automation controls for waste water, as well as servicing the needs of municipalities. We welcome them and look forward to the contributions they will make towards our goals as a Company.

"Our goal of adding 5 new acquisitions this year is well underway with many more waiting their turn to be acquired. The only limiting factor in making the acquisitions is our resources which have to be managed carefully as it takes a tremendous amount of time, money, and manpower during the pre and post closing of each acquisition, but I am very confident our Team can handle the goals set for them this year and next."

Jonathan Woods, CFO of NAS, in describing the acquisition, stated: "We have developed through our business plan an aggressive acquisition strategy to pursue target companies within our opportunity market that ranges from approximately $3 million to $5 million in gross revenues with positive earnings per annum period.

"Our Acquisition Committee and Board of Directors seized on the opportunity to pursue a company outside of our original target market and resolved to amend our original opportunity market to look for future acquisitions of this size and proportion. Based on the size of the private automation system and controls industry, we are not only planning to pursue, but we welcome, all new target companies ranging from $3 million to $25 million in gross revenues with positive earnings per annum period.

"We take pride in the relationships we have built, and continue to build, with our wholly owned subsidiaries through our aggressive acquisition strategy. Our integration of our acquisitions has been to date a positive experience for all with 100% full integration of our Accounting, Financial, and Human Resource systems within a 30- to 90-day period following acquisition while we continue to aggressively pursue other target companies."

"Lastly, this acquisition will qualify the consolidated group to meet most of the qualifications for listing on the NASDAQ or AMEX, which would build tremendous inherent value to all of our shareholders."

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NAS is making a much BIGGER ONE out of SMALLER ONES

From Hand Production to Automation

Before the Industrial Revolution, virtually all goods were made by hand. With the Industrial boom of the 1900's, automation and controls industry was born to improve the quality and reduce the costs of tedious, repetitive tasks in the industrial plants.

Immediately after World War II, computers were born, almost entirely for scientific purposes. By the early 60's, computers began to make their way rapidly into process control and production. Automated assembly lines took on more and more tasks, allowing for an increasing number of automated processes and adjustments. By eliminating tedious task usually performed by hand, the owners of a plant realized higher quality and more through put which improved not only quality, but competitiveness as well.

Today's Markets

Automation touches our lives without notice, from the food we eat, to the clothes we wear, to the building materials we use, i.e. food, clothing, and shelter, and almost everything else of which we consume or come in contact with uses automation.

Accordingly, the markets of National Automation Services, Inc., are vast. They include waste/water treatment, airport security systems, bottling plants, power plants, metals, mining, breweries, food processing, tire making, textiles, plastics, i.e. virtually all production activities.

Although there are a handful of very large automation and controls companies, the industry is highly fragmented with about 286 companies of modest size in the U.S., privately owned, and local in nature, and totalling approximately $32 billion in annual gross sales.

A handful of larger automation companies dominate the market as they offer national, as well as worldwide support for the Corporate and Government Clients they serve. Overall the automation industry in the U.S. alone tops the $400 billion mark each year which is largely serviced by this handful of firms.

Where We Are Going

NAS intends to build a nationwide company through acquisitions and internal growth in this fragmented market. We believe that our growing company will retain healthy margins and produce attractive increases in earnings per share during the period of this Plan. Our estimate is that we will immediately produce cost savings of 12-15% on each acquisition, thereby driving consolidated EBITDA and earnings per share. Furthermore, NAS, by utilizing the expertise of the group, the sharing of national contracts and proven revenue enhancement techniques, has the goal of doubling the gross sales of each acquisition in the first 12 months of the date of each acquisition.

The Company currently focuses on:

Industrial Automation and Control. NAS has an experienced staff of electrical and control engineers, as well as project managers, with experience in industrial automation and controls. The Company's business is currently focused in Nevada, Arizona and Utah, but it intends to expand through internal growth and acquisitions throughout the U.S. during 2007 and 2008.

Automation Manufacturing. The Company is a certified Underwriters Laboratories Panel fabrication facility. This nationally recognized regulatory body provides NAS with significant marketplace credibility for custom control panel assembly and fabrication to its clients.

FORWARD-LOOKING STATEMENT: This press release contains forward-looking statements, including expected industry patterns and other financial and business results that involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from results expressed or implied by this press release. Such risk factors include, among others: the sustainability of recent growth rates in the automation controls industry; the positioning of NAS in the market; ability to integrate acquired companies and technology; ability to retain key employees; ability to successfully combine product offerings and customer acceptance of combined products; general market conditions, fluctuations in currency exchange rates, changes to operating systems and product strategy by vendors of operating systems; and whether NAS can successfully gain market acceptance. Actual results may differ materially from those contained in the forward-looking statements in this press release.

Contact Information

    National Automation Services, Inc.
    Bob Chance
    2053 Pabco
    Henderson, NV 89011
    (702) 642-7720