Aug 7 2015
Revolution Lighting Technologies, Inc. (“Revolution Lighting”), a global provider of advanced LED lighting solutions, today announced it has acquired Energy Source, LLC, a turnkey provider of LED lighting based energy savings projects within the commercial, industrial, hospitality, retail, education and municipal sectors.
The acquisition brings together RVLT’s innovative portfolio of LED products and control systems with Energy Source’s expertise in providing LED focused energy savings projects, its strong customer base and preferred partnership status with utility companies across the Northeast, including National Grid and Eversource (formerly NStar). These partnerships, along with its customer base - including Citizens Bank, CVS Caremark and International Packaging - that covers facilities throughout the United States has enabled Energy Source to grow its revenues at a CAGR of over 45% since 2011.
Energy Source’s revenue and EBITDA are expected to be $30 million and $4.5 million, respectively, for the 2015 full year. In addition to the accretive effect of Energy Source’s existing business, RVLT is expected to provide Energy Source with a significant portion of its LED requirements in order to meet its customers’ demand for high quality LED products and solutions.
Under the terms of the agreement, RVLT paid a total purchase price of $30 million for 100 percent of the outstanding ownership interests of Energy Source: comprised of $10 million in cash, $10 million in RVLT common stock (approximately 8.8 million shares), and $10 million in the form of a promissory note (due on the one year anniversary of the acquisition with an annual interest rate of 5%) together with a 3 year earnout based on Adjusted EBITDA of Energy Source. The $10 million upfront cash portion has been financed through the issuance of RVLT common shares (approximately 8.7 million shares) to a non-affiliated investor.
The transaction has been structured so that the entire purchase price will be tax deductible for federal and state income tax purposes. RVLT expects the transaction to be accretive to earnings per share in the second half of 2015.
“We are excited to welcome Energy Source, as this strategic acquisition strengthens our existing relationships in key markets. With an ongoing need for energy efficiency and compelling savings, not only do we expect to see significant product pull-through from their existing and future projects, but a valuable resource as part of our growing management team,” said Robert V. LaPenta, Chairman, Chief Executive Officer and President of Revolution Lighting.
LaPenta further noted, “Mike Lemoi, president, and Ron Sliney, vice president, have over 55 years of combined experience in the lighting and energy business and they have clearly demonstrated, through their ownership and leadership of Energy Source, their deep understanding of the lighting and energy markets and the lighting solutions and programs that best serve these customers. We are very fortunate to have both Mike and Ron continue in their leadership roles at Energy Source and take on an active role within RVLT as we collaborate together for many years to come.”
“We are very happy to officially join the Revolution Lighting team as we share a similar full service approach to develop and implement cost effective energy efficient solutions for our growing list of clients,” said Mike Lemoi, President of Energy Source. “Revolution Lighting’s extensive LED product line and significant network platform combined with our comprehensive offering of LED based energy programs will allow Energy Source the ability to offer turn-key installations with superior LED products.”
“RVLT distributor partners will now also have the opportunity to offer full turn-key energy services to their existing customer base,” said Ron Sliney, Vice President of Energy Source. “We see this as a real win for all parties. Energy source will have the ability to bring a turnkey service to RVLT distributors helping them to increase LED product sales within their markets. This also will allow Energy Source to drive core RVLT products and services throughout the country and into many different market segments.”
“Energy Source has a vast amount of experience in a multitude of market segments including municipal, hospitality, commercial, industrial, retail, and educational. We are excited for the opportunity to continue to grow our business nationally with RVLT LED lamps, fixtures and network partners,” says Lemoi. “This relationship will allow us to drive our high-impact sales and energy service organization locally as well as nationally.”