SOURCE: ZBB Energy Corporation

ZBB Energy Corporation

January 24, 2011 08:28 ET

ZBB Energy Acquires Tier Electronics

Accelerates Push Into High-Growth Power Electronics Market; Acquisition Gives ZBB Full Range of Smart-Grid, Renewable Energy, Energy Storage, Power Quality and Energy Efficiency Solutions for Global Markets

MILWAUKEE, WI--(Marketwire - January 24, 2011) - ZBB Energy Corporation (NYSE Amex: ZBB) today announced it has acquired the Wisconsin-based power electronics firm Tier Electronics, LLC for a $1.35 million promissory note paid over 3 years, 800,000 shares of common stock and assumption of approximately $900,000 of liabilities including customer deposits of approximately $350,000. This acquisition dramatically expands ZBB's product portfolio of state-of-the-art power management systems, customer base, and served market. In addition, the transaction is expected to be accretive to operating cash flows and more than double the company's backlog and expected annual revenue. With the Tier acquisition, ZBB offers a full range of energy storage, utilization and management solutions that range from wind and solar converters to power quality, micro-grid systems and hybrid electric drives for vehicles. The resulting strategic plan will seize on expansive opportunities across the power management market and enable high growth.

"This is a game changer for us," said Eric Apfelbach, ZBB's President and CEO. "When it comes to renewable energy, we now have the capability to store it, use it and manage it over a wide range of powers and applications. From intelligent, modular sub assemblies to nodes on micro grids through smart grid applications greater than 1 MW, ZBB is positioned to be the price and performance leader in grid modernization power electronics technologies."

ZBB was attracted to Tier by their commitment to designing differentiated products that are modular, cost effective, rapidly manufactured and market ready. Tier's innovative and eloquent designs coupled with ZBB's ability to take products to the world-wide market will allow us to scale revenue quickly in our target market segments. Our ability to work together to design industry leading products was recently demonstrated when we worked together to secure a key design win on a transportable military power system. "I don't believe any of our competitors could have met the timeline we did, or will have the short design cycle times that we have going forward," said Apfelbach. 

Tier's comprehensive power electronics portfolio aligns perfectly with ZBB's target markets, complements ZBB's Power and Energy Control Center (PECC) technology, and provides further diversification and revenue in rapid growth markets, including:

  • Grid-tie inverters for wind and solar, marketed as Solindro™
  • Common DC bus systems for micro-grid and remote power stations, marketed as GridLand™
  • Hybrid electric vehicle drive controllers for commercial vehicles
  • Line regulators for improved power quality in facilities operating critical equipment
  • Ruggedized systems for a variety of military mobile, stationary and transportable applications

The combined technologies of ZBB Energy and Tier Electronics will change the way the world experiences power, with each of the above products currently being sold and operating in the following target markets:

Micro-Grids -- Ensure consistent and reliable power in environments that are often unstable and rely on generators for a significant portion of their power

Commercial Buildings -- Eliminate or minimize the use of diesel generators and lead-acid batteries for back-up power, and ensure consistent and clean power quality

Remote Operations -- Deliver power to locations such as military operating positions currently reliant on diesel generators and/or unreliable grid power

Communication Towers -- Provide environmentally sound, easily maintained and lasting power to cellular and communication towers reliant on diesel generators or lead-acid batteries

Electric Vehicle Charging -- Provide EV charging stations the ability to charge vehicles in a manner that is not disruptive to the grid

Hybrid Electric Vehicle Drives -- Drive controllers for next generation commercial vehicles

This acquisition positions ZBB and Tier to further leverage their capabilities within each of the above market applications that value innovative, integrated solutions engineered for price and performance. The acquisition also provides additional backlog in excess of $1,300,000 across Tier product lines, and aligns ZBB with additional strategically important customers currently served by Tier. 

As founder and lead technical designer for Tier Electronics, Jeff Reichard explains, "The acquisition combines Tier's power conversion expertise with ZBB's system applications experience to create innovative design, rapid-turnaround and price performance capabilities in a variety of markets, including alternative energy and power quality." 

In 2003, Reichard founded Tier Electronics with the goal of improving the power converters needed for the power quality and alternative energy markets. Tier Electronics developed the All-In-One (AIO) power converter to provide a lower cost higher performance digital power converter. The AIO converters achieved design objectives of delivering superior performance, significantly reducing physical size, and providing a truly integrated solution versus using modified power converters developed for other applications. The evolution of the AIO converters are used by Tier to meet the needs of power conversion where a basic 3 phase style converter falls short, offering a higher level of flexibility and performance typically not achievable without customized designs. AIO converters and all-in-one design concepts are used in many of Tier's current product lines, consisting of grid-tie inverters for integrating wind and solar, modular DC bus systems for micro-grids and remote power stations, hybrid electric vehicle controllers, line regulators to ensure power quality, and numerous component and system products for military applications. Tier's grid-tie inverters meet UL 1741 design requirements.

Prior to establishing Tier in 2003, Reichard founded Integrated Electronics in 1996 and rapidly grew the company by developing products at the leading edge of innovation, and offered significant price and performance advantages. Acquired by American Superconductor (AMSC) in 2000, Integrated Electronics developed the converter that became the standard for AMSC's power quality products.

Reichard will serve as President of Tier Electronics, as ZBB's Vice President of Electronics Development, and will serve as a member of ZBB Energy's Board of Directors. Tier currently has 16 employees and operates from a 10,400 sq ft leased facility in Menomonee Falls, WI. Tier Electronics, LLC will operate as a wholly owned subsidiary of ZBB Energy. 

"We're living in a world where the alternative energy sector is evolving. Cars are going from liquid fuel to electric, utilization of direct-current micro-grids is increasing and the shift from coal to renewable energy is growing by the day. We believe the combination with ZBB puts Tier's designs in a stronger position to have an immediate impact in today's rapidly changing alternative energy landscape," said Reichard.

In connection with the acquisition, ZBB awarded inducement options to purchase a total of 750,000 shares of the Company's common stock to members of Tier management. Jeff Reichard was awarded 650,000 of these options, of which (1) 420,000 will vest in three equal annual installments beginning on December 31, 2011 based on Tier's achievement of certain revenue goals and subject to his continued employment and (2) the remaining 230,000 of which will vest in three equal annual installments beginning on January 21, 2012 subject to his continued employment. Of the remaining 100,000 inducement options, 75,000 were awarded to Joanne Reichard, who will serve as Vice President of Tier, and 25,000 were awarded to Nathan Jobe, who will serve as Manager of Tier. These options will vest in three equal annual installments beginning on January 21, 2012 subject to Ms. Reichard's and Mr. Jobe's continued employment.

ZBB will host a conference call addressing the Tier acquisition on Tuesday, January 25, 2011 at 7:30 AM Central/8:30 AM Eastern time. Mr. Apfelbach will elaborate on the acquisition for interested listeners and take a few questions. To participate in the conference call please dial (888) 567-1602, at prompt please provide the access code 22872046. 

ZBB serves a variety of global markets, including utility, government, commercial, industrial and residential end customers. ZBB also provides its products to the U.S. Department of Defense through its various relationships with major defense contractors. The company has a 75,000 square foot manufacturing facility in Menomonee Falls, as well as research and development offices in Perth, Australia.

About ZBB Energy Corporation
ZBB Energy Corporation (NYSE Amex: ZBB) provides distributed intelligent power management platforms that directly integrate multiple renewable and conventional onsite generation sources with rechargeable zinc bromide flow batteries and other storage technology. This platform solves a wide range of electrical system challenges in global markets for various types of sites with utility, military, governmental, commercial, industrial and residential end customers. A developer and manufacturer of its modular, scalable and environmentally friendly power systems ("ZESS POWR™"), ZBB Energy was founded in 1998 and is headquartered in Wisconsin with offices also located in Perth, Western Australia.

Safe Harbor
Except for the historical information contained herein, the matters set forth in this press release, including statements relating to ZBB's growth, are forward-looking statements within the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed in or suggested by such statements, including the risk that the anticipated benefits of the Tier acquisition will not be realized, historical volatility and low trading volume of our stock, the risks and uncertainties inherent in the early stages of growth companies, the company's need to raise substantial additional capital to proceed with its business, risks associated with competitors, and other risks detailed from time to time in the company's most recent filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof. The company disclaims any intent or obligation to update these forward-looking statements.

Contact Information

  • Contact Information:
    Helen Brown
    Investor Relations
    ZBB Energy Corporation
    T: 262.253.9800
    Email: Email Contact