Raser to Acquire Amp, Adds Nearly $1 Billion in Long-Term Energy Contracts
Raser Technologies Inc. announced a definitive agreement to acquire Amp Resources ("Amp"), a private company with technologies focused on power generation. Under the terms of the agreement, Raser will acquire Amp and its portfolio of technologies for heat transfer and renewable power generation.
Raser will also assume ownership of multiple, long-term geothermal energy sales contracts with public and private utilities. These contracts call for an aggregate of $966 million from gross energy sales over 20 years. It is anticipated that these power generation projects will be developed and placed in service by December 2007.
Amp stockholders will receive up to 10 million shares of Raser common stock and approximately $38 million in cash. Raser will also assume liabilities and approximately $50 million in debt, which the company intends to retire within 12 months of closing.
Upon the close of the transaction, Amp stockholders will own approximately 16% of the combined company on a fully diluted basis. Raser expects this transaction to be accretive to earnings per share upon completion of the geothermal energy sales contract monetization transactions. JP Morgan Chase & Co. (NYSE:JPM) has been engaged by Raser as an investment banker and advised on the transaction.
"Raser is committed to bringing important new electric motor and power generation technologies to market through licensing and royalty arrangements with companies in the transportation, industrial and power generation markets. These markets form the three pillars of our strategic plan to grow Raser," said Brent M. Cook, Raser's chief executive officer. "We expect this transaction to provide a stable platform of cash flow and revenue that will fuel Raser's long-term growth strategy."
Amp is a technology licensing and development company focused on large-scale commercialization of geothermal and waste-heat energy resources. Amp has developed proprietary solutions based on a patented heat transfer technology for generating electricity from zero-emission and other "green" energy resources. Raser management believes the combination of Raser and Amp will accelerate the adoption of its Symetron™ technologies by industrial and power generation companies.
"Coupled with Amp's heat transfer technology, the Symetron™ value proposition is strong for both traditional, large power plants as well as for smaller power plants where the parasitic load is disproportionate to the generating capacity," Cook added. According to the Department of Energy, approximately 23% of total U.S. electric generating capacity is provided by more than 14,000 small plants with nameplate capacities of 100 megawatts or less.
