HOUSTON, April 6, 2020 /PRNewswire/ -- CUI Global, Inc.
(Nasdaq: CUI) ("CUI Global" or the "Company") today announced
the closing of the acquisition of Reach Construction Group
("Reach"), a privately held engineering, procurement and
construction ("EPC") company, specializing in utility-scale solar
construction throughout North
America, effective April 1,
2020.
The acquisition offers significant synergies for revenue growth,
including Reach's deep expertise in renewable energy project
delivery, particularly solar farms, site preparation and public
utility construction. Headquartered in Apex, NC, Reach has successfully executed over
40 projects in excess of 450 megawatts. The business is a
recognized leader in the solar construction industry with over 50
years combined experience in the delivery and management of both
commercial and renewable energy construction projects. Reach
develops and relies upon repeatable processes to provide its
customers a safe, high quality, predictable result at the lowest
cost.
In addition, Reach's in-house engineering capabilities, supply
chain relationships and industry expertise are expected to
complement and accelerate the growth of other divisions within CUI
Global, including its Orbital Gas Systems integration capabilities
and its new electric transmission and distribution services
operation branded as Orbital Power Services. Anticipated cost
synergies include leveraging existing sales, integration and
distribution infrastructure for cross-selling opportunities. Reach
has contractual backlog for FY2020 in excess of $100 million in North American projects. The
acquisition will immediately add significant revenues and
contribute positive net earnings to CUI Global.
Terms of the acquisition include the issuance of 2 million
restricted shares of CUI Global's common stock (the shares are
restricted for a 12-month period) and $35
million in Seller's debt. The Seller's debt is in the
form of two Promissory Notes due at between 18 and 36 months from
the effective date of the transaction. Additional terms include an
earnout provision, based on specific EBITDA targets.
Effective immediately, Reach will become a wholly-owned
subsidiary of CUI Global. Brandon
Martin will continue as chief executive officer ("CEO") of
Reach, reporting directly to CUI Global's CEO, Jim O'Neil. CUI Global expects no organizational
changes to Reach's operations in North
America or elsewhere.
"This transaction effectively positions CUI Global for even more
accelerated growth," said Jim
O'Neil, CUI Global's vice-chairman & CEO. "Reach's
talent base of technical employees and their world-class management
and support team, as well as their sterling reputation within the
renewable energy industry, will help drive increased growth across
our company portfolio. We believe both Reach and CUI Global will
see tremendous benefits, using our joint network of iconic
customers to market our combined portfolio of energy capabilities
and products to a much larger audience."
"This is a significant company milestone for Reach," explained
Reach's CEO, Brandon Martin.
"With the combination of these two companies, we will now be
able to expand our programs and services for our existing customer
base, while at the same time pursue growth opportunities across a
much broader market. As part of a global entity, we expect enhanced
visibility in the market and heightened awareness for our company
offerings."
Mr. O'Neil concluded, "The acquisition of Reach will be
immediately accretive, providing increased revenues, operating
margins, net earnings and significantly enhancing our ability to
penetrate the renewable (solar) energy market. This acquisition
demonstrates our commitment to further our strategy of making
opportunistic, synergistic acquisitions that will increase our
growth and, thereby, enhance our shareholder value."
Additional information on the acquisition will be available on
the Company's current report on Form 8-K that will be filed with
the Securities and Exchange Commission.
About CUI Global, Inc.
CUI Global, Inc. is a publicly traded company dedicated to
maximizing shareholder value through the acquisition and
development of innovative companies to create a diversified energy
services platform. CUI Global's Energy business, Orbital Gas
Systems is a leader in innovative gas solutions with more than 30
years of experience in design, installation and the commissioning
of industrial gas sampling, measurement and delivery systems
providing solutions to the energy, power and processing
markets. Orbital Gas Systems manufactures and delivers a
broad range of technologies including environmental monitoring, gas
metering, process control, telemetry, gas sampling and BioMethane.
As a publicly traded company, shareholders can participate in the
opportunities, revenues, and profits generated by the products,
technologies, and market channels of CUI Global and its
subsidiaries. But most important, a commitment to conduct business
with a high level of integrity, respect, and philanthropic
dedication allows the organization to make a difference in the
lives of their customers, employees, investors and global
community.
For more information please visit: http://www.cuiglobal.com
Important Cautions Regarding Forward Looking
Statements
This document contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
Such statements are subject to risks and uncertainties that could
cause actual results to vary materially from those projected in the
forward-looking statements. The Company may experience significant
fluctuations in future operating results due to a number of
economic, competitive, and other factors, including, among other
things, our reliance on third-party manufacturers and suppliers,
government agency budgetary and political constraints, new or
increased competition, changes in market demand, and the
performance or reliability of our products. These factors and
others could cause operating results to vary significantly from
those in prior periods, and those projected in forward-looking
statements. Additional information with respect to these and other
factors, which could materially affect the Company and its
operations, are included in certain forms the Company has filed
with the Securities and Exchange Commission.
Investor Relations:
KCSA Strategic Communications
David Hanover
T: 212-896-1220
dhanover@kcsa.com
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SOURCE CUI Global, Inc.