Pioneer Power Solutions, Inc. has acquired substantially all the assets of Harmonics Holdings Inc., a New Haven, Connecticut-based specialty provider of equipment that incorporates a patented technology for the elimination of harmonic currents in power distribution systems. Financial terms of the transaction were not disclosed. Based on Harmonics' current order backlog, the Company expects the transaction to be modestly accretive to both earnings and cash flow for the full-year 2015.
Harmonics develops, manufactures and markets its harmonics suppression technology to assist customers in countering damaging effects from 3rd harmonic current generated by heavy computer demand on power distribution systems. Through its patented Harmonic Suppression System (HSS®), Harmonics' customers have been able to realize annual operating savings for the life of their transformers in an environmentally friendly way. With more than 10,000 installed systems in continuous operation in the United States, Harmonics has helped a wide variety of projects across a broad array of industries recoup as much as 30% of wasted system electrical capacity, creating significant savings, while also contributing directly to the "greening" of the localities where their systems are installed.
The acquisition marries Harmonic's leading-edge, electronic suppression technology with magnetic-based solutions already provided by Pioneer, making for a more compelling value proposition to the Company's customers. The combination enables Pioneer to offer a wider range of value-added solutions for new installations and retro-fit projects, that also addresses broader market demand for more cost-effective, cleaner and technologically-advanced energy solutions.
"For our dry-type transformer business, this acquisition represents the latest step in our continuing evolution towards more highly-engineered, value-added solutions in our sales mix. We expect it to be the first of several initiatives we undertake to offer a more comprehensive array of power quality solutions to our customers - including harmonic filtering and power factor correction," commented Nathan Mazurek, Pioneer's Chairman and Chief Executive Officer.
Mr. Mazurek continued, "In addition, through Pioneer's Critical Power division, we intend to capitalize on Harmonics' most recent product introduction from August 2014 - GenMax(TM), a harmonic suppression system for paralleled generator applications." GenMax resolves power reliability and generator capacity issues frequently encountered when new generators are introduced to a system of existing ones at backup power plants, particularly when the make, models and power output of the generators are different.
Thomas Klink, President of Pioneer's U.S. dry-type transformer operations, said "As a key supplier to Harmonics over the last 5 years, we have been very impressed not only with the sophistication of Harmonics' core suppression technology, but with its ability to translate into commercial success in many high-profile projects for major corporate users in the broadcasting, healthcare, hi-tech, telecommunications and other sectors. We intend to build on this track record of installations and increase our market penetration by leveraging Pioneer's existing customer relationships and our distribution network."
