New Energy Systems Group to Acquire Shenzhen NewPower Technology Co., Ltd.
December 14 2009 - 8:30AM
PR Newswire (US)
-- $14.7 million purchase price consisting of cash and stock --
NewPower projected to generate at least $2.5 million of net income
in 2010 -- Acquisition increases profitability of New Energy's
existing battery distribution business -- Ability to increase
NewPower's production with minimal capital expenditures -- Enhances
New Energy's position as a vertically integrated manufacturer NEW
YORK and SHENZHEN, China, Dec. 14 /PRNewswire-Asia-FirstCall/ --
New Energy Systems Group (OTC:NEWN) (BULLETIN BOARD: NEWN) , a
manufacturer and distributor of battery components in China, today
announced that it has entered into an agreement to acquire Shenzhen
NewPower Technology Co., Ltd. ("NewPower"), a China-based
manufacturer of lithium ion batteries. The cost of the acquisition
will be $14.7 million, comprised of $3.0 million in cash and 1.8
million shares of New Energy's common stock with a value of $11.7
million at $6.42 per share. The transaction is expected to be
completed by year-end 2009. Shenzhen NewPower Technology Co., Ltd.
was founded in 2004 and is a rapidly growing manufacturer of
lithium ion batteries for cell phones and other portable devices.
The company's products range from low end cell phone batteries, to
state-of-the art, high capacity batteries. The company has a
longstanding reputation for its advanced technology and high
quality manufacturing capabilities. NewPower expects to generate
revenue of approximately $20.1 million in 2009 and $27.4 million in
2010. NewPower expects to generate net income of $1.5 million in
2009 and at least $2.5 million in 2010. Mr. Fushun Li, New Energy's
Chief Executive Officer, commented, "We have known NewPower's
management for many years and are excited to have them join our
organization in what we expect to be a seamless integration. We are
also pleased by NewPower's desire to take most of their
consideration in the form of New Energy common stock, which
reflects their confidence in New Energy's future prospects." Mr. Li
continued, "The NewPower acquisition is strategically important in
enabling us to further vertically integrate our business, which is
a key differentiator for New Energy Systems within the industry.
One example of the benefits of this vertical integration is that
since we will now be manufacturing lithium-ion batteries from start
to finish, the NewPower acquisition will enable us to capture
additional margin in our own finished battery distribution
business. As a result of the acquisition synergies, we expect
NewPower will contribute more than the $2.5 million of net income
projected for 2010 on a standalone basis." Mr. Li continued "We are
also excited about the opportunity to expand NewPower through
cross-selling and leveraging our strong distribution networks. As a
result of NewPower's excess capacity, we can rapidly increase
production with minimal capital expenditures. Finally, we believe
this acquisition illustrates our ability to identify and acquire
strategic businesses that leverage our core strengths and further
enhance our position in the rapidly growing lithium ion battery
industry." About New Energy Systems Group New Energy Systems Group
is a leading manufacturer and distributor of lithium ion batteries.
The company assembles and distributes finished batteries through
its sales network and channel partners. The company also sells
high-quality lithium-ion battery shell and cap products to major
lithium-ion battery cell manufacturers in China. The company's
products are used to power mobile phones, MP3 players, laptops,
digital cameras, PDAs, camera recorders and other consumer
electronic digital devices. Additional information about the
company is available at http://www.newenergysystemsgroup.com/ .
Forward Looking Statements Except for the historical information,
the matters discussed in this news release may contain
forward-looking statements, including, but not limited to, factors
relating to future sales. These forward-looking statements may
involve a number of risks and uncertainties. Actual results may
differ materially based on a number of factors, including, but not
limited to, uncertainties in product demand, risks related to doing
business in China, the impact of competitive products and pricing,
changing economic conditions around the world, release and sales of
new products and other risk factors detailed in the Company's most
recent annual report and other filings with the Securities and
Exchange Commission. For more information, please contact:
Crescendo Communications, LLC David Waldman or Klea Theoharis Tel:
+1-212-671-1020 Email: DATASOURCE: New Energy Systems Group
CONTACT: Crescendo Communications, LLC, David Waldman or Klea
Theoharis, +1-212-671-1020, Web site:
http://www.newenergysystemsgroup.com/
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