B.C.-based Carmanah Technologies (TSX: CMH) looks poised to sail away with more than $100 million after striking a deal to sell three of its business divisions to an American firm.
The Victoria company, best known for specializing in energy-optimized LED and solar products, announced the sale to SPX Corporation on December 12.
The North Carolina-based business will pay US$77 million ($103 million) to acquire Carmanah’s Sabik Marine, airfield ground lighting and aviation obstruction lighting divisions.
The deal is expected to close in January 2019, subject to shareholder approval.
“It’s a great deal for both companies,” Carmanah CEO John Simmons told Business in Vancouver, adding SPX plans to open an office in Victoria where employees from two of the newly acquired divisions will work.
Carmanah began building its marine division five years ago, acquiring businesses in Finland, Estonia and New Zealand.
“We’re being exceptionally well compensated for the work that we did bringing these more fragmented businesses together and creating a good marine singalling business,” Simmons said.
He added the company decided to sell off assets after concluding the three divisions required an investment “beyond our scope” if they were to take the next step in growth.
“Passing the baton to SPX Corp., which is much larger than we are and has significantly more resources, gives them a chance to take what we’ve carefully built and take it to the next step,” Simmons said.
Carmanah will now focus on its traffic, telematics, outdoor lighting and offshore wind divisions.
Simmons said the rise of technologies centred on smart cities and autonomous vehicles makes the potential behind remaining divisions even more enticing.
After taxes and fees, the deal with SPX will leave Carmanah with about $98 million in its coffers in addition to $20 million already in-house.
Carmanah was founded in 1996 by David Green, who was looking to develop solar-powered lighting for his sailboat.
It has since grown to 153 employees globally and generated revenue of $58.1 million during fiscal 2017.
In a release, Carmanah said it would examine growing the remaining business divisions or return money to shareholders if the company determines it has capital it won’t be using.