VICTORIA, BC, CANADA (February 1, 2019) Carmanah Technologies Corporation (TSX:CMH) (the “Company” or “Carmanah”), announced today that it has completed the sale of a significant portion of the assets of the Company to SPX Corporation for USD $77.0 million, as previously announced on December 12, 2018 and as approved by Carmanah shareholders at a special meeting held on January 22, 2019. The assets sold include all of the issued and outstanding equity interests of each Sabik Oy, Sabik Oü, Sabik Private Ltd., and Sabik Ltd., and their respective assets, the business and assets the Company’s Airfield Ground Lighting business, its Aviation Obstruction Lighting business as well as some miscellaneous business assets that support the businesses to be sold (the “Transaction”).
“We are pleased to have completed this important transaction and wish SPX Corporation and our former colleagues’ great success as they embark on an exciting future of growth and opportunity”, said John Simmons, CEO. “Equally, we look forward to focusing on the abundant prospects for growth and development in our retained businesses.”
The net cash proceeds of the Transaction after transaction costs and taxes is estimated to be approximately USD $73.5 million that, together with the Company’s projected cash balances of approximately USD $14.0 million, will result in total cash reserves of approximately USD $87.5 million. Company management and the board of directors of Carmanah have yet to fully consider how the Company will use the proceeds from the Transaction. Alternatives under consideration will include investments to grow the residual businesses of the Company by way of acquisitions or research and development spending, acquisitions of other businesses in new market spaces or returning cash to the shareholders by way of dividends or share buy-backs.
The Company continues to retain and operate the following 4 divisions: (i) Carmanah Traffic, which develops and sells traffic signaling devices including crosswalk and school zone warning systems, LED enhanced traffic signs, radar speed signs and miscellaneous traffic warning products; (ii) Sol, Inc., which develops and sells solar powered outdoor lighting for streets, parking lots and pathways; (iii) Carmanah Telematics, which designed, built and supplies solar powered, satellite connected asset tracking devices to its customer, a satellite operating company; and (iv) Sabik Offshore GmbH, which provides completely integrated safety and marking solutions from aids to navigation to aviation obstruction lighting for offshore wind farms (collectively the “Residual Businesses”). The Residual Businesses generated revenues in excess of USD $30 million in the trailing 12 months.
Alexander Capital Group Inc. of Toronto served as financial advisor to Carmanah and Borden Ladner Gervais acted as legal counsel.
About Carmanah Technologies Corporation
Carmanah designs, develops, and distributes a portfolio of products focused on energy optimized LED solutions for infrastructure. Since 1996, we have earned a global reputation for delivering durable, dependable, efficient, and cost-effective solutions for industrial applications that perform in some of the world’s harshest environments. We manage our business within two reportable segments: Signals and Illumination. The Signals segment serves the Offshore Wind, Traffic, andTelematics markets. The Illumination segment provides solar-powered LED outdoor lights for municipal and commercial customers.