Victoria, British Columbia, Canada - July 4, 2005 - Carmanah Technologies Corporation (TSX Venture: CMH) is pleased to announce that the Company has successfully acquired all of the issued and outstanding shares of Soltek Powersource Ltd. ("SPS"), a leading manufacturer/supplier of solar power systems for industrial, government, residential and retail applications.
This acquisition joins two successful and complementary companies - Carmanah with its self-contained solar packages and proprietary LED technology, and SPS with its large-scale solar power systems - to form a new and significant leader in solar power markets both domestically and internationally. The solar industry grew by an unprecedented 62% in 2004 to $6.5 billion, and is predicted to grow 300% to $18.5 billion by 2010. The combined purchasing power and market share will broaden the reach of both companies across many geographical and vertical markets in this sector.
"SPS is a thriving business with an excellent track record, outstanding growth prospects, and quality management. The acquisition of SPS is a significant step in the delivery of Carmanah's strategy to become a premiere global solar-powered solutions provider," stated Carmanah's CEO, Art Aylesworth. "Through shared technologies, market presence and sales/marketing infrastructure, the combined entity will occupy a strong international presence in the expanding market for renewable energy products. We will be able to capitalize faster and with more impact on the growing global awareness, acceptance and demand."
Carmanah anticipates that a new range of solar/LED general illumination products will be developed, including security lighting, street lighting and sign lighting, for applications in all of the markets the Company currently serves. An entirely new product line of standardized 'plug-and-play' solar power sources will also be possible, which would capitalize on SPS's existing range of 'solar engines' and Carmanah's world-leading energy management technology.
"Never has the demand for solar solutions been as strong as it is right now. This business combination comes at the opportune time to leverage increasing international commitments to use renewable power sources," stated SPS founder David Egles. "We are very excited about the opportunities the combined entities can now pursue in the US and around the world."
SPS founders David Egles and Michael Cannon have joined Carmanah's executive team, bringing with them more than 20 years of experience in the solar industry.
Carmanah has acquired SPS for $12 million. Subject to closing adjustments for working capital, $6 million was paid in cash from existing funds and $4 million equivalent in common shares at $2.66 per share. An additional contingent payment of up to $2 million worth of common shares at $2.66 may also be payable if SPS reaches specified revenue targets (pro-rated between $9 million and $12 million) and an EBITDA in excess of 5.5% of revenue for the six month period ending December 31, 2005. Principal vendors will be issued 300,000 performance warrants with an exercise price of $2.79 (being the weighted average trading price on the closing date of June 30, 2005, conditional upon SPS reaching increased revenue targets (prorated between $12 million and $14 million) and an EBITDA in excess of 5.5% of revenue for the six months ending December 31, 2005. The shares issued to the principal vendors will be held in a pooling agreement providing for the pro rata release of the shares over a two year period after closing.
About Carmanah Technologies Corporation
Carmanah is an award-winning manufacturer of proprietary LED-based lighting and illumination products for the marine, aviation, public transit, roadway, industrial worksite and illuminated signage markets. The Company has more than 100,000 solar-powered LED lighting installations and 50,000 LED illuminated signs installations in 110 countries. The shares of Carmanah Technologies Corporation are publicly traded on the TSX Venture Exchange under the symbol "CMH" and on the Berlin and Frankfurt Stock Exchanges under the symbol "QCX". For more information, please visit www.carmanah.com.
About Soltek Powersource Ltd.
SPS, a wholly-owed subsidiary of Carmanah Technologies Corporation, is a leading designer, manufacturer and supplier of renewable energy solutions. In addition to acting as a master reseller for a number of world leading equipment suppliers, SPS offers a range of proprietary solar power and alternative energy systems used by commercial, government and private customers worldwide. SPS is headquartered in Victoria, British Columbia with branch offices in Alberta, Ontario and California. For more information, please visit www.spsenergy.com.
On Behalf of the Board of Directors
Carmanah Technologies Corporation
Praveen Varshney, Director
For further information, please contact:
Mr. Mark Komonoski, Director
Carmanah Technologies Corporation
Tel: (403) 861-8384
Mr. David Davies
Tel: (250) 382-4332
This release contains forward-looking statements within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties are described under the caption "Note Regarding Forward-looking Statements" and "Key Information - Risk Factors" and elsewhere in Carmanah's Annual Report for the fiscal year ended December 31, 2004, as filed with the U.S. Securities and Exchange Commission and which are incorporated herein by reference. Carmanah does not assume any obligation to update the forward-looking information contained in this press release.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.