New Energy Systems paid $3m in cash and 1.8 million shares of New Energy’s common stock. As per the original agreement, entered on December 15, 2009, the company’s shares were trading at $6.42, resulting in a total purchase price at the time of $14.7m.
Fushun Li, CEO of New Energy, said: “We are pleased to have successfully completed the acquisition of NewPower, a rapidly growing manufacturer of lithium ion batteries for cell phones and other portable devices. The company has a very strong reputation in the industry for its advanced technology and high quality manufacturing capabilities.
“We expect NewPower alone will contribute more than $27m of revenue and over $2.5m of net income for 2010. In addition, the NewPower acquisition will enable us to capture additional margins and increase the profitability of our own finished battery distribution business. Moreover, NewPower has sufficient capacity to more than double its current production with minimal capital expenditure requirements. As a result, we expect to generate strong incremental margins as we ramp up production of our newly combined organizations.”
New Energy Systems assembles and distributes finished batteries through its sales network and channel partners. The company also sells lithium-ion battery shell and cap products to lithium-ion battery cell manufacturers in China.
