Solomon Technologies, Inc. (OTCBB:SOLM) announced that it has entered into a letter of intent to acquire Power Solutions, Inc., a manufacturer of high volume direct current power supplies and power supply systems and components for the medical, telecommunications and commercial sectors that is based in Long Island, New York. As part of this acquisition, Solomon will also acquire a controlling stake in Ultrapower Ltd., a manufacturer of power supplies and other products that is located in Taiwan, and which is presently held by Power Solutions.
According to the letter of intent, Solomon will purchase Power Solutions for $5 million in cash, of which $250,000 would be held in escrow for 15 months to secure certain obligations of the sellers. The transaction is subject to the negotiation and execution of a definitive purchase agreement and the satisfaction of assorted closing conditions, including a due diligence investigation and the negotiation and execution of agreements with Power Solutions personnel. While no assurances can be given as to when the acquisition may close, Solomon currently anticipates that the acquisition will be finalized during the second quarter of 2006.
Solomon President Peter W. DeVecchis, Jr., said, "We are very excited about combining the capabilities of Power Solutions with Solomon's unique intellectual property. The combination should permit us to expand our system product offerings, open new market channels in the commercial sector, and bring a low cost offshore manufacturing capability to Solomon." He continued, "We expect to consolidate Power Solutions' domestic operations in Danbury, Connecticut alongside Technipower's operations."
A previous letter of intent had been signed by Solomon in December of 2005 in regard to the acquisition of Technipower LLC, a Danbury, Connecticut based manufacturer of power supplies and related equipment for the defense, aerospace and commercial sectors. Solomon was to purchase Technipower for $3 million in cash and common stock valued at $2.4 million. Solomon was also to assume Technipower�s revolving credit facility as part of the transaction. The target date for the closing of the acquisition was to be sometime during the first quarter of 2006.
