INFRAX SYSTEMS, Inc. (OTCBB: IFXY), a global provider of unified
Smart Grid-related products and services for the Energy and Utility
industries, announced today that it has entered into an agreement
to acquire Broadband Holdings, Inc., and affiliate companies
including Broadband Specialists, Inc., a privately-held,
full-service engineering, and design firm. BSI has recently been
awarded contracts by The State of Texas, AT&T, and Time Warner
Cable, as well as significant wind farm and rural fiber to the home
(FTTH) initiatives.
Under the terms of the agreement, Infrax systems will acquire
Broadband Holdings and all affiliates, including BSI's 32,500
square foot headquarters and operations facility located on 9.23
acres, for approximately $8M in a combination of cash and Preferred
stock, subject to a Lock Up and Leak Out agreement, at closing. The
final purchase price will be based on a third-party valuation of
Broadband Holding's business and holdings. Infrax will continue to
support Broadband Holdings customer base and utilize their
expertise in future smart grid deployment projects.
The BSI technical team's multi-disciplined expertise will
augment Infrax's technical capabilities. Management of the combined
Companies will include executives and Board members from both
organizations. Broadband Specialists' 2009 revenues exceeded $8M,
with forecasted 2010 broadband and alternative energy design and
construction revenues expected to substantially exceed 2009
revenues, on a standalone basis and has an over $30M backlog of
committed infrastructure contracts for 2011 and beyond. Infrax
anticipates significant revenue growth as a result of adding BSI's
design and installation capabilities to our Secure Intelligent
Energy Platform.
"All the employees and management at BSI are excited about the
strategic timing of the combining of our two entities. Combining
the power and skills of the BSI broadband, utility, renewable
energy, and smart grid deployment service team offerings with the
metering, demand response and distribution automation applications
Infrax has perfected for end users will bring true value and
dynamic growth opportunities, impressive margins and what we
believe will be very rewarding shareholder returns during the most
aggressive period of infrastructure deployment and improvements
this nation has witnessed in the past century" said Gerry Locke,
CEO of BSI.
Broadband Specialists is a fifty-five employee full-service
network construction firm providing complete design, engineering
and electrical collection grid construction, as well as underground
and aerial communications and control systems installation for
utilities and large commercial wind and solar plant developments
(distributed power generation). Additionally, BSI provides cabling
and technical services to major telephone companies, rural
telephone companies, cooperatives and cable companies.
"BSI's complete range of Inside Plant (ISP) and Outside Plant
(OSP) services makes them an excellent choice to enhance Infrax's
Smart Grid solutions. With BSI, Infrax can offer end to end
solutions to our utility customers including secure wireless and
fiber deployments for metering, demand response, distributed power
generation and distribution automation applications" said Paul J.
Aiello, CEO of Infrax Systems. "Their expertise implementing
wireless backhaul solutions also enhances the fit between our
companies. BSI has installed fiber to over 300 wireless towers in
the past few years in support of 4G roll outs."
How does this acquisition affect Infrax Systems
and what it means to our shareholders;
- Revenues -- BSI's acquisition will add an
estimated, $30M in revenue to Infrax systems' topline revenue over
the next two years, which does not includes the Smart Grid and the
Wireless Broadband revenue contributions.
- Shareholder Equity -- BSI's acquisition
will add, an estimated, $6M in shareholder equity to our balance
sheet at closing, subject to the final review of our accounting
firm.
- Human Resources -- BSI's acquisition will
add fifty-five employees to our current staff of 12.
- Product Offerings -- With BSI, Infrax can
truly offer end to end solutions to our utility customers including
secure wireless and fiber deployments for metering, demand
response, distributed power generation systems and distribution
automation applications.
- Broader Revenue Opportunities -- This
acquisition will allow combined Companies to target revenue
opportunities upgrading America's aging infrastructure. The market
for BSI's services can be compared to the original build outs of
the electrical grid, telephone systems and the networks of
interstate highways in the 1950's and 1960's. America's existing
electrical, gas and water lines are aging. According to the Energy
Information Administration, or "EIA", the electric utility market
is one of the largest industries in North America. Globally the
industry is expected to spend close to $10 trillion by 2030 to
upgrade and effectuate Smart Grid technologies. In the U.S., the
Federal Government forecasts that the total amount of private and
public funds that will be invested in smart grid projects through a
stimulus program will be $8.1 billion.
As part of the transaction, Infrax has engaged Source Capital
Group, Inc. (www.sourcegrp.com), a boutique investment bank
headquartered in Westport, CT with expertise in micro-cap growth
companies in the Utility and Communications markets. According to
SCG Managing Director, Investment Banking, Vik Grover, CFA, "The
combination of Infrax and BSI should create a force in the Utility
Infrastructure and Smart Grid market, as the two companies build on
their existing relationships and capabilities. They will be
incredibly well positioned to take advantage of the pent up demand
for upgrading America's communications, utility and transportation
infrastructure, which together are receiving hundreds of billions
of stimulus funding from the federal government over the next
several years. This transaction is one more step in a series of
transactions that should position Infrax as a market leading
provider of one-stop shop Smart Grid and Broadband Solutions in the
U.S. and abroad."
The acquisition is expected to close within 60 days after the
completion of due diligence. Additional financial details of the
transaction will be disclosed with the completion of the
acquisition or when available.
About Broadband Specialists, Inc.
Broadband Specialists Inc. (BSI) is a minority owned, privately
held, full service Telecommunications Industry construction firm,
with our corporate offices located in the Dallas/Ft. Worth
Metroplex, the nation's 4th largest market. Since our founding in
1992, BSI has provided aerial and underground cabling and technical
services to telephone, cable and broadband service providers in
rural and urban markets in 12 States. Operating as Locke
Electronics from 1978 to 1992, BSI provided the same services in
Indiana, Ohio, Kentucky, New York, Florida, Tennessee and Texas.
BSI specializes in the design, construction, splicing, activation,
testing and maintenance of Hybrid Fiber-Coaxial (HFC) Systems,
Fiber to the Home (FTTH) construction, middle mile and long haul
Fiber Optics Networks.
BSI is skilled in the design and deployment of voice, data and
video networks, specializing in the outside plant construction. In
addition, BSI has designed and installed the electrical and data
monitoring network for several alternative energy and wind farm
networks in Texas and Oklahoma. BSI believes in the future of smart
grid technology and the deployments of smart grid distribution
automation (DA) and automated metering infrastructure (AMI). BSI
provides consulting services such as telemedicine, distance
learning, network architecture, NG911, construction, public and
government relations, project management and job costing. BSI will
offer a turnkey solution, or a-la-carte construction and technical
services from the network design phase through proof of performance
and system certification. BSI offer permitting, right of way
acquisition, locating, auditing and other support related
services.
For Broadband Specialists information, visit
www.bsicable.com
About INFRAX Systems
Infrax Systems offers a series of interrelated operational
management, communications, and grid security related products and
services known as Secure Intelligent Energy Platform (SIEP). Our
products enable a comprehensive and unified solution for
communications and applications management of the Smart Grid. SIEP™
incorporates a wide array of communications, security, device and
data management tools for Smart Grid applications such as advanced
metering solutions and grid optimization. SIEP platform creates a
unified solution to securely manage Advanced Metering
Infrastructure (AMI) and distribution automation. Infrax's secure
smart grid platform, incorporates a communications transport and
management system, (Grid Mesh™), device and data security
management, and ultimately secures intelligent endpoint devices
(SIED). The secure management of the "last mile" backhaul will be
necessary for utilities to implement Smart Grid applications
including AMI, real-time pricing, Demand Side Management (DSM),
Distribution Monitoring and Automation. When combined, these
applications can offer economic, operational and environmental
benefits for utilities, and ultimately the utility's customers.
For INFRAX Systems information, contact Investors@Infraxinc.com
or visit www.infraxinc.com.
Forward-Looking Statements This press
release may contain forward-looking statements covered within the
meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements relate to, among other things,
plans and timing for the introduction or enhancement of our
services and products, statements about future market conditions,
supply and demand conditions, and other expectations, intentions
and plans contained in this press release that are not historical
fact and involve risks and uncertainties. Our expectations
regarding future revenues depend upon our ability to develop and
supply products and services that we may not produce today and that
meet defined specifications. When used in this press release, the
words "plan," "expect," "believe," and similar expressions
generally identify forward-looking statements. These statements
reflect our current expectations. They are subject to a number of
risks and uncertainties, including, but not limited to, changes in
technology and changes in pervasive markets.
Contact: Media Contact: Infrax Systems, Inc.
investors@infraxinc.com 727-498-8514