Manitowoc-based Orion Energy Systems Inc. has signed a definitive agreement to acquire all of the issued and outstanding equity interests of Harris Manufacturing Inc. and Harris LED LLC of Green Cove Springs, Fla.
Harris, engineers, designs, sources and manufactures energy efficient lighting systems, including fluorescent and LED lighting solutions, and day-lighting products.
The initial purchase price for the transaction is $10 million, subject to closing date adjustments for net working capital, funded debt and certain other items. Subject to such adjustments, the purchase price will be paid in a combination of $5 million of cash, $3 million in a three-year unsecured subordinated note and $2 million of unregistered Orion common stock. Additionally, Orion may pay up to an additional $1 million in shares of unregistered common stock upon Harris’ post-closing achievement of certain revenue milestones in calendar year 2013 and/or 2014.
Consummation of the transaction is expected to occur early in Orion’s second quarter of fiscal 2014, subject to various conditions, including receipt of material third party consents and approvals and other customary closing conditions.
Harris Manufacturing and Harris LED had combined unaudited revenue of approximately $14.5 million and combined unaudited net income of approximately $0.9 million during the year ended Dec. 31, 2012.
Orion also announced fiscal fourth quarter net income of $0.5 million, or 3 cents per share, up from a net loss of $0.2 million, or 1 cent per share, in the same period a year ago.
“For the second consecutive quarter, we delivered both year-over-year revenue and earnings growth. Our fourth quarter results continue to demonstrate the value of the strategy we implemented during 2012 that focused on streamlining our sales and product development operations, while instilling a sense of accountability and financial discipline throughout the organization,” said John Scribante, chief executive officer of Orion. “We are also pleased to announce the purchase agreement of Harris Manufacturing. This strategically important transaction further expands the breadth and depth of our offering with a comprehensive product line that includes LED and fluorescent fixtures, day-lighting products, and fixture retrofit solutions. In addition, Harris will further expand our sales force and broaden the markets we serve, as well as provide immediate accretive growth in earnings. Overall, we enter fiscal 2014 in a much stronger position, and are poised to capitalize on the growing opportunities ahead of us.”