Allied Motion Technologies Inc. (NASDAQ: AMOT) announced today it has completed the purchase of 100% of the stock of Östergrens Elmotor AB (Östergrens), headquartered in Solna, Sweden that was previously announced on December 17, 2010. The amount paid at closing was $8.3 million, consisting of approximately $7.4 million of cash and 136,700 shares of common stock of Allied Motion. Additional amounts may be paid in cash to the sellers based on Östergrens meeting certain performance criteria through the end of 2011. Allied Motion funded the acquisition primarily with cash on hand, as well as utilization of the Company’s existing credit facility. For reference purposes, the original Press Release announcing the agreement follows in its entirety. Östergrens has extensive expertise in designing drive electronics, software and mechanical processes. The products are manufactured at Östergrens’ facilities in Sweden and China. Östergrens’ current products integrate their electronics expertise with other motion control products such as motors and gears. Their products are sold to OEM customers throughout Europe and are used in a wide variety of industrial, commercial and medical applications, including emerging “Green Technology” alternative energy and electric vehicle applications, leading-edge medical instrumentation and test equipment applications and a wide variety of other industrial and commercial applications in which Östergrens’ products improve the efficiency/performance of the OEM’s products. For 2009, Östergrens had revenues of approximately U.S. $15 million, and total assets at September 30, 2010 were approximately U.S. $5.6 million. For the nine months ended September 30, 2010, Östergrens has experienced an increase in revenue to an annualized amount of approximately U.S. $17 million and improved profits compared to the same period of last year. “The addition of Östergrens launches the next chapter in the development of our company,” commented Dick Warzala, President and CEO of Allied Motion. “This acquisition furthers our growth strategy by enabling us to expand our geographic coverage and our technical capabilities to compete more effectively in both our existing and additional new markets by approaching each application from a complete 'Motion Control Solution' perspective. Östergrens will become a part of our existing Allied Motion Europe operations and will report to Harry Cloos, the current General Manager of Allied Motion Premotec. Börje Östergren, the Managing Director of Östergrens will continue in his current role and will also assist in the development of Allied Motion Solution Centers in other regions of the world.”
Börje Östergren commented, "As we reviewed the succession options for our company, we made the decision that Allied Motion would be the best fit for us. My management team and I feel very much aligned with the goals and direction and the culture at Allied Motion and we are excited about becoming an integral part of the organization. I am confident that together we can add significant new value for the combined entity and I look forward to the new challenges this opportunity will bring."Dick Warzala further commented that “Östergrens has been in the motion control business since 1979 and their primary expertise lies in their ability to develop motion solutions through the application and integration of motion products sourced from several companies. In addition, Östergrens has expanded their engineering capabilities to design and develop state-of-the-art electronic motion control solutions to provide a complete motion solution for their customers. Östergrens has 40 employees in Europe and 18 employees at their facility in Changzhou China. The China facility was opened in 2004 and has licenses that allow them to import, export, trade domestically and to manufacture products in China. The Changzhou operation provides a foundation from which we will improve our sourcing capabilities, our technical capabilities, provide an increased level of support and further expand our business in the region. “Strategically, the geographic locations and technical capabilities of Östergrens, provides us with key elements to continue the growth of our company. With Allied Motion having the driving force of Technology/Know-How, we recognize that our future success lies in our ability to continually enhance our areas of expertise including applied marketing, design, applications, lean, quality and sourcing engineering personnel. The Östergrens team brings a vast level of experience, knowledge and technical capabilities that expands and enhances our capabilities to meet our goal of providing our customers with Motion Solutions That Raise the Bar. We welcome Östergrens to the Allied Motion team and we look forward to our future growth and development together.” Headquartered in Denver, Colorado, Allied Motion designs, manufactures and sells motion control products into applications that serve many industry sectors. Allied Motion is a leading supplier of precision and specialty motion control components and systems to a broad spectrum of customers throughout the world.
The statements in this press release that relate to future plans, events or performance are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements, and may contain the word “believe,” “anticipate,” “expect,” “project,” “intend,” “will continue,” “will likely result,” “should” or words or phrases of similar meaning. Forward-looking statements involve known and unknown risks and uncertainties that may cause actual results of the Company to differ materially from the forward-looking statements. With respect to the proposed acquisition of Östergrens, risks and uncertainties include the possibility that the Company may have difficulties retaining or servicing Östergrens’ customers; the acquired business does not perform in accordance with past results or our expectations; and the Company may have difficulties managing or successfully integrating the acquired business into the Company’s business model without substantial costs, delays or problems. Other risks and uncertainties include those associated with the present economic conditions in North America and throughout Europe, general business and economic conditions in the Company’s motion markets, introduction of new technologies, products and competitors, the ability to protect the Company’s intellectual property, the ability of the Company to sustain, manage or forecast its growth and product acceptance, success of new corporation strategies and implementation of defined critical issues designed for growth and improvement in profits, the continued success of the Company’s customers to allow the Company to realize revenues from its order backlog and to support the Company’s expected delivery schedules, the continued viability of the Company’s customers and their ability to adapt to changing technology and product demand, the loss of significant customers or enforceability of the Company’s contracts in connection with a merger, acquisition, disposition, bankruptcy, or otherwise, the ability of the Company to meet the technical specifications of its customers, the continued availability of parts and components, increased competition and changes in competitor responses to the Company’s products and services, changes in government regulations, availability of financing, the ability of the Company’s lenders and financial institutions to provide additional funds if needed for operations or the ability of the Company to obtain alternate financing if present sources of financing are terminated, the ability to attract and retain qualified personnel who can design new applications and products for the motion industry. The Company’s ability to compete in this market depends upon its capacity to anticipate the need for new products, and to continue to design and market those products to meet customers’ needs in a competitive world. Actual results, events and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements as a prediction of actual results. The Company has no obligation or intent to release publicly any revisions to any forward-looking statements, whether as a result of new information, future events, or otherwise.