PIXONEmpower Technologies to acquire Pixon Imaging business
Ticker Symbol: C:EPT
Empower Technologies to acquire Pixon Imaging business
Empower Technologies Corp (C:EPT)
Shares Issued 42,968,504
Last Close 10/1/2009 $0.30
Friday October 02 2009 - News Release
Mr. Paul Leung reports
NEWS RELEASE-EMPOWER TECHNOLOGIES ANNOUNCES SIGNING THE DEFINITIVE AGREEMENT TO PURCHASE PIXON
Empower Technologies Corp. and Pixon Imaging LLC have signed a definitive agreement for Empower to purchase all of the business and assets of the San Diego-based privately held Pixon Imaging in a cash and stock transaction valued at approximately $2.4-million (U.S.) plus an earn-out bonus subject to certain conditions. This concludes the "Letter of Intent" Empower announced on September 14, 2009. With this purchase, Empower is taking their proprietary advanced embedded technology to the expanding image processing market that serves a large global military, security, surveillance, and first response customer base demanding real time imaging applications.
Pixon Imaging products include proprietary imaging algorithms, including real-time dehazing, deblurring, dewarping, and contrast enhancement. Their marketing is targeted at major defence contractors, imaging equipment manufacturers, government agencies, and military, security, and surveillance companies.
"Adding Pixon Imaging to Empower Technologies unlocks the sales potential of Empower's embedded technology implementation - the single board computer in the fast growing image processing market. It provides Pixon Imaging direct access to Empower's embedded system technologies that are already being used by a leading engineering school: MIT Media Lab" said Paul Leung, CEO of Empower. "A revenue catalyst for Empower, the Pixon Imaging purchase will help Empower to broaden sales channels and benefit from Pixon Imaging's potential revenue and earnings growth in addition to our own."
Under the terms of the agreement, Pixon Imaging will receive US$2-million cash and 1.5-million Empower shares over a 5-year period, of which US$1.4-million and 900,000 shares are subject to the assets purchased meeting certain sales or earnings conditions. All shares are to be issued at the greater of the market price at the time of issue or Cdn$0.25 per share and are subject to certain resale restrictions. The purchase price also includes up to a further US$4-million by way of an earnout bonus equal to 25% of the operating earnings over the next five years, subject to certain conditions. Empower will assume all outstanding Pixon Imaging sales contracts and purchase orders.
The principals of Pixon Imaging are Dr. Richard Puetter, CEO and Chief Scientist, Dr. Chiyoko Lord, Vice President, Business Development, and Skip Powers, Vice President. Under the terms of this transaction, the principals will sign a five-year employment agreement to continue full-time in managing the business and further developing the products, services and technologies.
"We are proud of Pixon Imaging's achievement of becoming a premier supplier in real time image enhancement technology in a very short time and our ability to manage our development and supply chain with limited resources and yet still be capable of engaging and serving very large customers" said Dr. Richard Puetter, CEO and Chief Scientist of Pixon Imaging. "For Pixon Imaging to grow and to expand in this much larger global business theatre we need a partner that has the financial, operational, engineering, and customer service expertise and experience. Empower offers that and more to quickly bring our organization to a much more established, disciplined, and larger scale to move to the next level while strengthening their sales with our well established imaging product lines and proven customer base."
Pixon Imaging's expertise is inventing innovative highly efficient and sophisticated image processing algorithms to solve complex imaging problems. Combining their advanced imaging algorithms using Empower's high performance single board computer creates very exclusive image processing products. The surveillance camera market is one of the major sales channels for Pixon Imaging. It is estimated to be a US$4 billion market. Pixon Imaging already has major surveillance equipment manufacturers as their customers to bundle with their products. At the same time, Pixon Imaging can access the existing established end-user base to upgrade their existing installations by adding Pixon Imaging's real time image processor without a major investment to buy new cameras to achieve much improved imaging results in real time.
With this acquisition, Empower has the opportunity to achieve rapid sales and revenue growth by leveraging Empower's established R&D, engineering and operating organization to augment Pixon Imaging's growing innovative imaging product lines driven by customer demand. Empower and Pixon Imaging will also integrate their respective IP (Intellectual Properties) to create optimized solutions for real time image processing products that cannot be done by hardware or software alone. Empower expects synergistic benefits in many areas of the organization. In operations, Empower will provide the purchasing power, manufacturing, and logistic support. In administration, Empower will provide IT, accounting, and back office support. In R&D and engineering, Pixon Imaging will be able to use Empower's established team of hardware and software engineers without using third party contractors. In sales and marketing, Pixon Imaging's established customers will open new sales avenues for Empower. In turn, Empower will offer Pixon Imaging customer service on a much larger and professional scale. Pixon Imaging will operate as an autonomous division and initially will be branded Pixon Imaging, an Empower Technologies Company. It will be led by Dr. Richard Puetter.
The transaction is subject to customary closing conditions including completion of satisfactory due diligence, Empower obtaining adequate financing and receipt of regulatory approval. The transaction is expected to close in December 2009. Dr. Puetter will be appointed director of Empower on completion of the transaction.
© 2009 Canjex Publishing Ltd.