SAN DIEGO and SEOUL, South
Korea, Feb. 28, 2017 /PRNewswire/
-- Maxwell Technologies, Inc. (NASDAQ: MXWL) ("Maxwell") and
Nesscap Energy Inc. (TSX VENTURE: NCE) ("Nesscap"), leading
developers and manufacturers of capacitive energy storage and power
delivery solutions, today announced that they have entered into an
agreement (the "Arrangement Agreement") in which Maxwell
proposes to acquire substantially all of the assets and business of
Nesscap (the "Arrangement" or the "Transaction").
Maxwell will purchase the operating entities of Nesscap for a
total purchase price of $23.175
million, or about 1.1 times annualized revenue based on
Nesscap's 9-month revenue ended September
30, 2016. The purchase price will be paid by the issuance of
approximately 4.6 million Maxwell shares, subject to a 10% upward
or downward adjustment based on the average closing price of
Maxwell shares for the 10 consecutive trading days ending two days
prior to closing.
Each of Maxwell's and Nesscap's board of directors has
unanimously approved the Transaction. In approving the
Transaction, Nesscap's Board of Directors has received a verbal
fairness opinion from its financial advisor, Paradigm Capital Inc.,
stating that the consideration to be received by Nesscap is fair
from a financial point of view to Nesscap and it expects to receive
the written fairness opinion in connection with the mailing of a
circular to its shareholders.
Based on recent share price ranges and subject to the payment by
Nesscap of outstanding indebtedness owed by Nesscap to I2BF Energy
Limited ("I2BF") and Arbat Capital Group Ltd. ("Arbat") in an
aggregate principal amount of $4.5
million (plus accrued and unpaid interest) and of certain
other outstanding liabilities, Nesscap shareholders and debt
holders are expected to own approximately 12% of Maxwell's total
outstanding common shares following completion of the
Transaction. As part of the Arrangement, Maxwell entered into
a principal shareholders agreement with I2BF and Arbat, which
together own approximately 80% of the common shares of Nesscap, and
will represent approximately 10% of the ownership of Maxwell
following closing, subject to any adjustment based on Maxwell's
share price as set forth above. Pursuant to the terms of the
principal shareholders agreement, Maxwell has agreed to appoint a
representative of I2BF and Arbat to Maxwell's Board of Directors,
which such representative shall initially be Ilya Golubovich. Such appointment is subject to
the closing of the Transaction and is intended to be no later than
one business day following Maxwell's 2017 Annual Meeting of
Shareholders.
In order to become effective, the Transaction must be approved
by two-thirds of Nesscap shareholders. In addition, I2BF and Arbat
are both a related party to the Company, as such term is defined in
Multilateral Instrument 61-101 – Protection of Minority
Securityholders in Special Transactions ("MI 61-101").
Therefore, the Arrangement will also be conditional upon the
approval of a simple majority of the Nesscap shareholders,
excluding I2BF and Arbat. Nesscap has relied on the exemption from
the valuation requirements of MI 61-101 contained in section
4.4(1)(a). Upon completion of the Arrangement, it is expected that
Nesscap will voluntarily dissolve (the "Dissolution") pursuant to
Section 237(a) of the Business Corporations Act
(Ontario).
It is expected that a special meeting of Nesscap Shareholders to
approve the Arrangement and the Dissolution will be held in the
second quarter of 2017 (the "Meeting"). The Arrangement is also
conditional upon customary terms for transactions of this nature
including the approval of the Ontario Superior Court of Justice
(Commercial List) (the "Court").
Further particulars of the Meeting, the Arrangement, the
Dissolution and the Arrangement Agreement will be included in the
information circular for the Meeting. If all approvals are obtained
and other conditions met, it is expected that the Arrangement will
be completed by the second quarter of 2017.
I2BF, Arbat as well as all the directors and officers of Nesscap
have entered into Voting Agreements with Maxwell in support of the
Arrangement, and Nesscap has agreed to use best efforts to obtain
Voting Agreements from other key shareholders in advance of the
Meeting. The Voting Agreement requires such shareholders,
subject to termination rights, to, among other things, vote all of
their Nesscap common shares in favor of the Arrangement.
As a market leader in innovative small cell format
ultracapacitor products and technologies, Nesscap provides
research, development and manufacturing of energy storage and power
delivery solutions that complement Maxwell's large cell format
ultracapacitor product portfolio, with operations in Korea,
Germany, and China. Maxwell expects to capitalize on
synergies between the two companies that will accelerate top-line
growth and earnings, increase the innovation rate, and create an
expanded and strengthened product portfolio. With a strengthened
sales channel, increased R&D capabilities, and improved
manufacturing efficiencies, Maxwell will be able to deliver more
products, faster into target markets thereby benefitting customers
and other technology adopters. Key benefits of the
Transaction include:
- Expanded and solidified opportunity in Wind, Automotive, and
Industrial Markets - In wind pitch control, the Transaction
creates a leading-edge product portfolio including a full range of
competitive small cell and large cell offerings. With respect to
the automotive market, the acquisition brings pre-existing design
wins and revenue in back-up power and extends Maxwell's reach in
the market. Moreover, small cell-based product solutions also
broaden opportunities in the rapidly growing industrials market.
Nesscap already has a solid position in this market with a strong
base in Europe, which adds revenue
diversity and creates further opportunities for growth.
- Accelerated innovation and product time to market with an
expanded portfolio - Emerging from strong customer traction and
product launches by both companies in 2016, the combination
increases scale and leverages R&D to deliver additional new,
differentiated products faster. The enhanced R&D team, along
with a strengthened global sales channel, accelerates product,
technology, and cost innovations into key markets.
- Improved small-cell competitiveness through cost structure
improvement - Margin expansion is anticipated from economy of
scale and materials cost savings, a streamlined supply chain, and
gains in operational efficiency from combined manufacturing.
- Accretive growth with positive financials and
product/customer synergies - The transaction is expected to be
immediately accretive to Maxwell's non-GAAP earnings per share
following close, which is anticipated to be in Q2 of 2017, and
Maxwell expects the Nesscap business to deliver positive adjusted
EBITDA in 2017.
"With the acquisition of the Nesscap business, Maxwell will be
stronger and better equipped to help existing and new customers
address the growing demand for advanced ultracapacitor solutions to
improve energy efficiency and meet government mandates for reduced
emissions," said Dr. Franz Fink,
Maxwell's president and CEO. "Our highly complementary product
portfolio and development pipeline will address these challenges
and likewise enable our customers to continuously innovate and
deliver in their key markets over the years to come."
"Maxwell and Nesscap share the vision that ultracapacitor
technology, with its clear advantages in power, lifetime, and
temperature performance, will continue to advance and gain share in
an increasing number of applications," said Jim Zuidema, CEO of Nesscap. "This acquisition
will enable us to accelerate fulfillment of that vision, combining
two exceptional teams, and move faster to bring more breakthrough
products to markets which are hungry for scalable and efficient
energy solutions."
About Maxwell: Maxwell is a global leader in the
development and manufacture of innovative, cost-effective energy
storage and power delivery solutions. Maxwell ultracapacitor
products provide safe and reliable power solutions for applications
in consumer and industrial electronics, transportation and
telecommunications. Maxwell high-voltage grading and coupling
capacitors help to ensure the safety and reliability of electric
utility infrastructure and other applications involving transport,
distribution and measurement of high-voltage electrical energy. For
more information, please visit our website: www.maxwell.com.
About Nesscap: Since its inception in 1999, Nesscap
has become an award-winning global leader in technology innovation
and product development of ultracapacitors. Attributes of the
ultracapacitor allow for the technology to be used in applications
where power, life cycle requirements or environmental conditions
limit the suitability of batteries or capacitors. Nesscap products
are available in both cells and modules and are used to enhance the
performance of modern applications ranging from portable electronic
devices to high performance windmills and high-tech "green" cars.
The Nesscap product portfolio features the widest array of standard
commercial products in the market from 3 farads to 6,200 farads
with industry-recognized alternative organic electrolytes. Its
customers are active in the transportation, renewable energy,
industrial and consumer markets. Technical and sales information
can be found at www.nesscap.com.
None of the shares to be issued by Maxwell pursuant to the
Arrangement Agreement have been or will be registered under the
United States Securities Act of 1933, as amended (the "U.S.
Securities Act"), or any state securities laws, and any securities
issued pursuant to the Arrangement are anticipated to be issued in
reliance upon the exemptions from such registration requirements
pursuant to Section 3(a)(10) of the U.S. Securities Act and
applicable exemptions under state securities laws. This press
release does not constitute an offer to sell or the solicitation of
an offer to buy any securities.
Non-GAAP financial measures
In addition to GAAP reporting, Maxwell provides
investors with certain information on a non-GAAP basis, including
earnings before interest, taxes, depreciation and amortization
("EBITDA"). This non-GAAP information excludes amortization of
acquisition-related intangibles, share-based compensation expense,
restructuring charges, and acquisition-related costs. Management
does not believe that the excluded items are reflective of the
Company's underlying performance. The exclusion of these and other
similar items from Maxwell's non-GAAP presentation should not be
interpreted as implying that these items are non-recurring,
infrequent or unusual. Maxwell believes this non-GAAP
financial information provides additional insight into the
Company's ongoing performance and has therefore chosen to provide
this information to investors for a more consistent basis of
comparison and to help them evaluate the results of the Company's
ongoing operations and enable more meaningful period-to-period
comparisons. These non-GAAP measures are provided in addition to,
and not as a substitute for, or superior to, measures of financial
performance prepared in accordance with GAAP. Maxwell is
not readily able to reconcile the projected EBITDA information
provided herein to a GAAP calculation thereof.
Cautionary note regarding forward-looking statements
This announcement contains forward-looking statements (including
within the meaning of Section 21E of the United States Securities
Exchange Act of 1934, as amended, and Section 27A of the United
States Securities Act of 1933, as amended) concerning Maxwell
Technologies, Inc. ("Maxwell") and its proposed acquisition
(the "Acquisition") of substantially all of the assets of
Nesscap Energy, Inc. ("Nesscap") and related matters. These
statements include, but are not limited to, statements that address
Maxwell's expected future business and financial performance and
statements about (i) the timing, completion and expected benefits
of the Acquisition, (ii) plans, objectives and intentions with
respect to future operations and products, (iii) competitive
position and opportunities, (iv) the impact of the Acquisition on
the market for Maxwell products, (v) other information
relating to the Acquisition and (vi) other statements identified by
words such as "will", "expect", "intends", "believe", "anticipate",
"estimate", "should", "intend", "plan", "potential", "predict"
"project", "aim", and similar words, phrases or expressions. These
forward-looking statements are based on current expectations and
beliefs of the management of Maxwell and Nesscap, as well
as assumptions made by, and information currently available to,
such management, current market trends and market conditions and
involve risks and uncertainties, many of which are outside the
companies' and management's control, and which may cause actual
results to differ materially from those contained in
forward-looking statements. Accordingly, you should not place undue
reliance on such statements.
Particular uncertainties that could materially affect future
results include any risks associated with the Transaction such as:
(1) the risk that the conditions to the closing of the Arrangement
are not satisfied, including the risk that required approvals from
the stockholders of Nesscap for the Transaction or required
regulatory approvals are not obtained; (2) litigation relating to
the Transaction; (3) uncertainties as to the timing of the
consummation of the Transaction and the ability of each party to
consummate the Transaction; (4) risks that the proposed Transaction
disrupts the current plans and operations of Maxwell
and Nesscap; (5) the ability of Maxwell
and Nesscap to retain and hire key personnel; (6)
competitive responses to the proposed Transaction; (7) unexpected
costs, charges or expenses resulting from the Transaction; (8)
potential adverse reactions or changes to business relationships
resulting from the announcement or completion of the Transaction;
(9) Maxwell's ability to achieve the growth prospects and synergies
expected from the Transaction, as well as delays, challenges and
expenses associated with integrating Nesscap into Maxwell's
existing businesses; (10) legislative, regulatory and economic
developments; (11) completion of the Dissolution; and (12) the
expected benefits of the Arrangement to the Nesscap
shareholders.
The foregoing review of important factors that could cause
actual events to differ from expectations should not be construed
as exhaustive and should be read in conjunction with Maxwell's and
Nesscap's filings with the Securities and Exchange
Commission ("SEC") and the Canadian Securities Administrators
("CSA"), which you may obtain for free at the SEC's website
at http://www.sec.gov and SEDAR's website at
http://www.sedar.com, and which discuss additional important risk
factors that may affect their respective businesses, results of
operations and financial conditions. Maxwell and Nesscap
undertake no intent or obligation to publicly update or revise any
of these forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.
Certain statements that are not historical facts made in this
press release may be "forward-looking statements" within the
meaning of applicable Canadian securities legislation
(forward-looking information and forward-looking statements being
collectively herein after referred to as "forward-looking
statements") and are subject to risks and uncertainties. Statements
containing words such as "will", "could", "expect", "may",
"anticipate", "believe", "intend", "estimate", "plan" and other
similar expressions are forward-looking statements that represent
management's beliefs at the time the statements are made and are
based on certain factors and assumptions. Such forward looking
statements may include, without limitation, statements regarding
the date of the Meeting, the timing of the mailing of the
information circular for the Meeting, the closing of the
Arrangement, the completion of the Dissolution, the expected
benefits of the Arrangement to Shareholders and receipt of the
necessary Shareholder and regulatory approvals.
Additional information and where to find it
In connection with the proposed Arrangement, Nesscap intends to
file relevant materials with the Canadian Securities
Administrators ("CSA"). Promptly after filing its proxy circular
with the CSA, Nesscap will mail its proxy circular along with
other meeting materials to each shareholder and option holder of
Nesscap entitled to vote at the special meeting relating to the
Arrangement. INVESTORS AND SECURITY HOLDERS OF NESSCAP ARE URGED TO
READ THESE MATERIALS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS
THERETO) AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE
PROPOSED TRANSACTION THAT NESSCAP WILL FILE WITH THE CSA WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT NESSCAP AND THE PROPOSED TRANSACTION. The definitive proxy
statement, the preliminary proxy statement and other relevant
materials in connection with the proposed transaction (when they
become available), and any other documents filed by Nesscap with
the CSA, may be obtained free of charge at SEDAR's website
(http://www.sedar.com) and at Nesscap's website
(http://www.nesscap.com).
For Nesscap shareholder inquiries, please contact Morganbridge
Communications, +1 (416) 918-6589, jayhussey@morganbridge.com.
For more information, contact:
Media:
Sylvie Tse, Metis Communications: +1
(617) 236-0500, maxwell@metiscomm.com
Investors: Soohwan Kim, The
Blueshirt Group: +1 (415) 489-2208,
soohwan@blueshirtgroup.com
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SOURCE Maxwell Technologies, Inc.