Carmanah Signs an Agreement to Acquire Lightech Electronic Industries Ltd.

September 21, 2010
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VICTORIA, BRITISH COLUMBIA, CANADA (September 21, 2010) – Carmanah Technologies Corporation (“Carmanah” or the “Company”) (TSX:CMH), a leader in solar LED lighting and power systems for a range of industrial applications, today announced that it has signed a definitive agreement (the “Agreement”) to acquire all of the outstanding shares of Lightech Electronic Industries Ltd. (“Lightech”), an Israeli corporation (the “Transaction”). 

Lightech is a global player in power supplies for LED lighting, supplying major lighting OEMs and distributors. Lightech designs drivers and transformers for use in LED and Halogen lighting fixtures from research and development facilities located in Israel and California, manufactures these drivers and transformers through EMS contractors in China and distributes these products worldwide through logistics centers in Hong Kong, California, Canada and the United Kingdom.  For fiscal 2009, Lightech’s audited International Financial Reporting Standards (“IFRS”) revenues were US$19.5 million, gross margin was 26.2% and net loss was US$1.2 million.  For the first six months ending June 30, 2010, Lightech’s unaudited IFRS revenues were US$10.6 million, gross margin was 40.0% and net income was US$0.8 million.

Carmanah’s strategic rationale for the acquisition is to:

  1. Gain access to the large global transition to LED technology by acquiring a core component (electronic driver) supplier to lighting providers,
  2. Expand the Company’s offering to include components and systems to key lighting providers and customers,
  3. Strengthen the Company’s global presence, manufacturing, delivery, and routes to market, and
  4. Generate operating and R&D efficiencies in both companies.

The Agreement provides that, subject to certain adjustments, the Company will pay aggregate consideration of US$18.5 million to the securityholders of Lightech, which consideration consists of (i) US$0.6 million paid upon the signing of the Agreement, (ii) US$10.7 million paid upon the closing of the Transaction, (iii) the issuance of 8.6 million common shares of the Company upon the closing of the Transaction with a value of US$6.2 million (based on Carmanah’s 120 trading day volume-weighted average closing price prior to the execution of the Agreement) and (iv) US$1.0 million paid 180 days from the closing of the Transaction (the “Deferred Payment”). One-half of the Common Shares to be issued will be placed into escrow upon the closing of the Transaction, with one-half of such Common Shares being released from escrow nine months after the closing of the Transaction and the remaining Common Shares being released from escrow eighteen months after the closing of the Transaction. In addition, the Deferred Payment will be held in escrow for 180 days following the closing of the Transaction.  The Common Shares and the Deferred Payment held in escrow will be used to settle any post-closing claims or adjustments. The Agreement also provides for the payment of up to an additional US$1.5 million to the securityholders of Lightech if certain revenue targets are achieved by Lightech in fiscal 2011.

The completion of the Transaction is subject to satisfying certain customary conditions for transactions of this nature as well as other conditions agreed to by the parties, which include obtaining Toronto Stock Exchange approval of the issuance of the Common Shares to the securityholders of Lightech and completion by Carmanah of a public offering of securities (the “Offering”). Subject to satisfying these conditions, the Transaction is expected to close in November 2010 following expiry of the required statutory waiting period in Israel for transactions of this nature.

“With this merger, Carmanah makes an expansion into a complementary and synergistic business” said Rob Cruickshank, Chairman of Carmanah. “Carmanah will be taking advantage of the vast lighting market’s current shift to LED, and applying the joint resources of Carmanah and Lightech to satisfy the urgent market need for LED lighting. In turn, the resulting technology developments at Lightech will ultimately advance the capabilities and applications of Carmanah’s outdoor area illumination product portfolio.”

“This is an important and exciting development for Lightech as it will not only allow Lightech to continue to build on its existing strengths but also provide our global customers with an established technology path to meet their future needs for state-of-the-art solutions,” said David Schreiber, the Chairman and CEO of Lightech.

“Carmanah has been preparing itself organizationally, operationally and strategically for acquisition for over a year in order to address the rapidly growing market for LED lighting products,” said Ted Lattimore, CEO of Carmanah. “We’ve been looking for a reputable, established route to market into the LED electronics supply industry, where our core technical competence in energy management could be applied to enhance product development, and where economies of scope and scale across the combined organization could be employed. We found the right opportunity in Lightech.”

Carmanah has engaged Canaccord Genuity Corp. (“Canaccord”) to act as lead agent for the Offering.  Pursuant to the Offering, Canaccord will offer to sell common shares of Carmanah, on a fully marketed, commercially reasonable efforts basis. The structure, amount and pricing of the Offering will be determined in the context of the market. The closing of the Offering under satisfactory terms is a condition precedent of the Transaction. As of June 30, 2010, Carmanah had US$6.7 million of cash or cash equivalents on hand.



About Lightech Electronics Industries Ltd.

Lightech invents, designs, and produces a comprehensive range of power supplies for light fixtures. It leads in LED efficiency and dimming, empowering its customers in North America, Europe and the Far East to produce slim, attractive, energy efficient and reliable fixtures. Since 1997, proven and professional management has yielded outstanding technological leadership, a high level of expertise and a strong foundation of intellectual property. For more information, visit

About Carmanah Technologies Corporation

Since 1996, Carmanah has been engineering some of the most advanced solar LED lighting on the market. With over 300,000 installations worldwide, Carmanah technology has been put to the test in virtually every environment on Earth. Featuring a patented energy management system that provides enhanced autonomy and system performance, reliable off-grid lighting is something Carmanah is known for. Carmanah is a publicly traded company, with common shares listed on the Toronto Stock Exchange under the symbol”CMH”. Carmanah is backed by a worldwide network of lighting professionals. For more information, visit


 “Roland Sartorius”

Roland Sartorius
Chief Financial Officer

For further information, please contact:

Investor Relations: Roland Sartorius
Toll-Free: 1.877.722.8877

Public Relations: David Davies
Tel: +1.250.382.4332

Forward-Looking Statements

Certain statements contained in this press release, constitute “forward looking statements”. The words “may”, “would”, “could”, “will”, “intend”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “continue” and similar expressions are intended to identify forward looking statements. Forward looking statements contained in this press release include statements related to the completion of the Lightech acquisition, the Lightech business and the Offering.

Such forward looking statements involve known and unknown risks, uncertainties and other factors that could cause actual results or events to differ materially from those anticipated in such forward looking statements. Although the forward looking statements contained in this press release are based upon what management believes to be reasonable assumptions, readers cannot be assured that actual results will be consistent with these forward looking statements. Examples of the assumptions underlying the forward looking statements contained herein include, but are not limited to assumptions relating to:

  • the completion of the acquisition of Lightech;
  • incorporation of the Lightech business into the Company’s operations and realization of the benefits, synergies and economies of scale for the combined business operations;
  • completion of the conditions precedent to the Lightech acquisition, including completion of the Offering;
  • commercial trends in the light emitting diode (“LED”) lighting adoption rate, solar product and area lighting, and related markets;
  • expected market fundamentals and development of country specific markets; and
  • the Company achieving its targeted future operating and financial results.

Many factors could cause the Company’s actual results, financial condition or performance to differ from those expressed as forward looking statements in this press release, including, but not limited to, the following factors, which are discussed in greater detail under the heading “Risk Factors” in the Company’s annual information form dated March 31, 2010:

  • the failure or significant delay in completing the Lightech acquisition;
  • failure or delay in satisfying the conditions precedent to the Lightech acquisition, including the Offering;
  • the failure or significant delay in integrating the Lightech business into the Company’s operations and realize any business synergies;
  • a lack of commercial acceptance or demand for the Company’s or Lightech’s products; and
  • unexpected trends or developments in the solar and LED lighting markets.

In evaluating these statements, readers should specifically consider various factors, including, but not limited to, the risks and uncertainties discussed under the heading “Risk Factors” in the Company’s annual information form dated March 31, 2010. These forward looking statements are made as of the date of this press release. The Company does not undertake any obligation, except as required under applicable law, to publicly update or revise any forward looking statements.