Ormat Technologies, Inc. (“Ormat”) (NYSE:ORA) today announced that
it has entered into a definitive agreement to acquire substantially
all of the business and assets of Viridity Energy, Inc.
(“Viridity”), a privately held Philadelphia-based company with
nearly a decade of expertise and leadership in demand response,
energy management and storage. The acquisition, which is expected
to close early 2017, will mark Ormat’s entry into the growing
energy storage and demand response markets, with an established
North American presence.
Initial consideration for the acquisition is $35
million, which will be paid at closing and is subject to adjustment
in certain cases. Additional contingent consideration will be
payable in two installments upon the achievement of certain
performance milestones measured at the end of fiscal years 2017 and
2020. We expect Viridity to generate a positive operating income in
2017.
Using proprietary software and solutions,
Viridity serves primarily retail energy providers, utilities, and
large industrial and commercial clients. Viridity’s offerings
enable its clients to optimize and monetize their energy
management, demand response and storage facilities potential by
interacting on their behalf with regional transmission
organizations and independent system operators. Founded in 2008,
Viridity has under contract over 850 MW across 3,000 sites,
including management of a portfolio of non-utility storage assets
located in the northeastern US with over 80,000 operational market
hours.
“This is an important strategic acquisition
which combines Viridity’s technology, its customer base, its highly
experienced leadership team and employees that have in-depth
knowledge and significant expertise in the demand response and
energy storage and its presence in key North American markets
together with Ormat’s skills, resources, engineering strengths and
access to capital,” commented Isaac Angel, Ormat’s CEO. “Ormat
intends to use the Viridity platform to accelerate long term
growth, expand its market presence, and further develop Viridity’s
demand response VPower™ software platform and energy storage
services. Ormat will continue to provide services and products to
existing customers, while expanding into new geographies and
targeting a broader potential customer base. By leveraging the
strength, stability, resources, EPC capabilities and global reach
of Ormat, we expect to unlock significant new value for Ormat and
its shareholders in the demand response and energy storage markets
and generate incremental revenue and operating income.”
Energy storage continues to be one of the
fastest growing segments of the broader energy industry, set to
reach an overall installed power capacity of 143.7 GW and a
cumulative global market size of $162.3 billion in the next 10-year
period, according to Navigant Research. This
represents a CAGR of approximately 30% over the 10-year period in
both in-front-of-the meter grid connected and behind-the-meter
commercial and industrial deployments.
“Ormat’s long-term vision is to evolve from a
recognized leader in the geothermal industry to a leader in the
broader renewable energy market,” added Mr. Angel. “Establishing
capabilities in the energy storage markets is a key element in
realizing Ormat’s vision, as these capabilities will enable Ormat
to provide a complete solution to customers. The acquisition will
enable Ormat to become a significant player in the growing energy
storage and demand response markets and to diversify its
traditional customer base with new commercial and industrial
(C&I) customers as well as utility customers, particularly in
the energy storage markets.”
“This acquisition is a clear win for the
Viridity business and its existing customers,” added Mack Treece,
CEO of Viridity. “With Ormat’s management depth, global reach,
extensive relationships and financial resources, the Viridity
business will be fully empowered to improve its products and
services, and deliver increasing value to its customers.”
About Ormat Technologies
With over five decades of experience, Ormat
Technologies, Inc. is a leading geothermal company and the only
vertically integrated company engaged in geothermal and recovered
energy generation (REG), with the objective of becoming a leading
global provider of renewable energy. The company owns, operates,
designs, manufactures and sells geothermal and REG power plants
primarily based on the Ormat Energy Converter – a power generation
unit that converts low-, medium- and high-temperature heat into
electricity. With 72 U.S. patents, Ormat’s power solutions have
been refined and perfected under the most grueling environmental
conditions. Ormat has 450 employees in the United States and over
600 overseas. Ormat’s flexible, modular solutions for geothermal
power and REG are ideal for the vast range of resource
characteristics. The company has engineered, manufactured and
constructed power plants, which it currently owns or has installed
to utilities and developers worldwide, totaling over 2,000 MW of
gross capacity. Ormat’s current 710 MW generating portfolio is
spread globally in the U.S., Guatemala, Guadeloupe, and Kenya.
Ormat’s Safe Harbor
Statement
Information provided in this press release
contains statements that address activities, events or developments
that we expect or anticipate will or may occur in the future,
including such matters relating to current expectations, estimates,
forecasts and projections about the acquisition described herein,
Ormat’s business strategy and goals, development or operation of
assets, market and industry developments and the growth of Ormat’s
business and operations that are “forward-looking statements” as
defined in the Private Securities Litigation Reform Act of 1995.
When used in this press release, the words “may”, “will”, “could”,
“should”, “expects”, “plans”, “anticipates”, “believes”,
“estimates”, “predicts”, “projects”, “potential” or “contemplate”
or the negative of these terms or other comparable terminology are
intended to identify forward-looking statements, although not all
forward-looking statements contain such words or expressions.
These forward-looking statements generally relate to Ormat’s plans,
objectives and expectations for future operations and are based
upon its management’s current estimates and projections of future
results or trends specifically, the statement related to operating
income in 2017. Although we believe that our plans and
objectives reflected in or suggested by these forward-looking
statements are reasonable, we may not achieve these plans or
objectives. You should read this press release completely and
with the understanding that actual future results and developments
may differ materially from those projected as a result of a number
of risks and uncertainties, many of which are beyond our control.
For a discussion of such risks and uncertainties, see “Risk
Factors” as described in Ormat Technologies, Inc.’s Annual Report
on Form 10-K filed with the Securities and Exchange Commission on
February 26, 2016.
These forward-looking statements are made only
as of the date hereof, and we undertake no obligation to update or
revise the forward-looking statements, whether as a result of new
information, future events or otherwise, even though our situation
may change in the future.
Ormat Technologies Contact:
Smadar Lavi
Investor Relations
775-376-2030
slavi@ormat.com
Investor Relations Agency Contact:
Rob Fink/Brett Maas
Hayden - IR
646-415-8972/646-536-7331
rob@haydenir.com / brett@haydenir.com
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