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A-Power Energy Generation Systems, provider of distributed power generation systems in China has signed a memorandum of understanding to acquire 100% of Evatech of Kyoto, Japan, designer and manufacturer of industrial equipment for LCDs (liquid crystal displays) and PDPs (plasma display panels).
The all-cash $50 million transaction is expected to be primarily funded through a combination of government subsidies and loans. Government subsidies are expected to amount to 40% - 45% of the total purchase price, while auditors in Japan are currently preparing a fairness opinion for the transaction.
''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.''
A-Power expects to sign a definitive purchase agreement with Evatech by September and close the transaction by the end of November 2009.
