ZBB Energy Acquires Tier Electronics

January 24, 2011 by Jeff Shepard

ZBB Energy Corp. announced that it has acquired the Wisconsin-based power electronics firm Tier Electronics, LLC for a $1.35 million promissory note paid over 3 years, 800,000 shares of common stock and assumption of approximately $900,000 of liabilities including customer deposits of approximately $350,000. This acquisition dramatically expands ZBB’s product portfolio of state-of-the-art power management systems, customer base, and served market. In addition, the transaction is expected to be accretive to operating cash flows and more than double the company’s backlog and expected annual revenue. With the Tier acquisition, ZBB offers a full range of energy storage, utilization and management solutions that range from wind and solar converters to power quality, micro-grid systems and hybrid electric drives for vehicles. The resulting strategic plan will seize on expansive opportunities across the power management market and enable high growth.

"This is a game changer for us," said Eric Apfelbach, ZBB’s President and CEO. "When it comes to renewable energy, we now have the capability to store it, use it and manage it over a wide range of powers and applications. From intelligent, modular sub assemblies to nodes on micro grids through smart grid applications greater than 1 MW, ZBB is positioned to be the price and performance leader in grid modernization power electronics technologies."

ZBB was attracted to Tier by their commitment to designing differentiated products that are modular, cost effective, rapidly manufactured and market ready. Tier’s innovative and eloquent designs coupled with ZBB’s ability to take products to the world-wide market will allow us to scale revenue quickly in our target market segments. Our ability to work together to design industry leading products was recently demonstrated when we worked together to secure a key design win on a transportable military power system. "I don’t believe any of our competitors could have met the timeline we did, or will have the short design cycle times that we have going forward," said Apfelbach.

Tier’s comprehensive power electronics portfolio are said to align perfectly with ZBB’s target markets, complements ZBB’s Power and Energy Control Center (PECC) technology, and provides further diversification and revenue in rapid growth markets, including: grid-tie inverters for wind and solar, marketed as Solindro™ common dc bus systems for micro-grid and remote power stations, marketed as GridLand™; hybrid electric vehicle drive controllers for commercial vehicles; line regulators for improved power quality in facilities operating critical equipment; ruggedized systems for a variety of military mobile, stationary and transportable applications.

As founder and lead technical designer for Tier Electronics, Jeff Reichard explained, "The acquisition combines Tier’s power conversion expertise with ZBB’s system applications experience to create innovative design, rapid-turnaround and price performance capabilities in a variety of markets, including alternative energy and power quality."

Reichard will serve as President of Tier Electronics, as ZBB’s Vice President of Electronics Development, and will serve as a member of ZBB Energy’s Board of Directors. Tier currently has 16 employees and operates from a 10,400 sq ft leased facility in Menomonee Falls, WI. Tier Electronics, LLC will operate as a wholly owned subsidiary of ZBB Energy.

"We’re living in a world where the alternative energy sector is evolving. Cars are going from liquid fuel to electric, utilization of direct-current micro-grids is increasing and the shift from coal to renewable energy is growing by the day. We believe the combination with ZBB puts Tier’s designs in a stronger position to have an immediate impact in today’s rapidly changing alternative energy landscape," said Reichard.