Aug 12 2009
A-Power Energy Generation Systems Ltd. (Nasdaq: APWR) (''A-Power" or "the Company"), a leading provider of distributed power generation (''DG'') systems in China and a fast-growing manufacturer of wind turbines, today announced that it has signed a memorandum of understanding (''MOU'') to acquire 100% of EVATECH Co., Ltd. (''EVATECH'') of Kyoto, Japan, a 22-year-old designer and manufacturer of industrial equipment for LCDs (liquid crystal displays) and PDPs (plasma display panels). The all-cash transaction is initially valued at $50 million and is expected to be primarily funded through a combination of government subsidies and loans. Government subsidies are expected to amount to 40% to 45% of the total purchase price, and auditors in Japan are currently preparing a fairness opinion for the transaction. A-Power expects to sign a definitive purchase agreement with EVATECH by September and close the transaction by the end of November 2009.
''We are truly excited about the potential of adding EVATECH's advanced thin-film solar technology to our reservoir of expertise in the design, manufacturing and installation of clean energy systems,'' said Mr. Jinxiang Lu, A-Power's Chairman and CEO. "The timing is fortuitous for alternative energy developers in China. Our central government just last month announced the 'Golden Sun' project to subsidize up to 70% of the costs of building solar farms with a total capacity of at least 500MW by 2012, versus the country's current capacity of 80MW.''
Mr. Lu continued, ''EVATECH has more than 20 years of experience in developing thin-film products, and since 2006, it has begun producing production lines for thin-film PV batteries, with dedicated R&D centers in Japan. EVATECH's world-leading PV technologies include the 'atmospheric-pressure chemical vapor deposition' (AP-CVD) manufacturing technique and the 'transparent conducting oxide' (TCO) glass, which could significantly reduce thin-film battery production costs and enhance its photoelectric conversion rate, which with EVATECH's current technology, already stands at 8%. During EVATECH's restructuring process in the courts of Japan, it was seeking a strategic buyer with complementary product offerings. A-Power's initial plan is to keep EVATECH's two current R&D centers in Japan while moving the production of thin-film PV batteries and TCO glass coating to China, thus further reducing production costs by exploiting China's low-cost manufacturing advantage.''
Based in Kyoto, EVATECH currently has 85 employees and has branch offices in Tokyo, Shanghai and Taiwan. Its main manufacturing facility and its thin-film photovoltaic R&D center are located in Kyoto. It sells to customers in about 10 countries outside Japan, 46 of which are in China, which is EVATECH's largest overseas market. Due to certain financial difficulties with the operation of its business, EVATECH is currently undergoing a rehabilitation process in the courts of Japan related to its corporate and debt restructuring.