Fort Lee-based Pioneer Power Solutions, a company engaged in the manufacture, sale and service of electrical transmission, distribution and on-site power generation equipment, completed the sale of its liquid filled and dry type transformer businesses to Mill Point Capital, a middle-market private equity firm, for a base purchase price of $68 million.
The purchase price consists of $60.5 million in cash and the issuance of two subordinated promissory notes to Pioneer Power in the aggregate principal amount of $7.5 million. The purchase price is subject to customary post-closing adjustments, such as working capital, according to Pioneer Power Solutions.
Pursuant to the transaction, Pioneer sold all of Pioneer Transformers Ltd. and the companies comprising its Dry Type Transformer Group, which included Jefferson Electric Inc., Bemag Transformer Inc. and Harmonics Limited LLC.
“Selling this portion of our business for approximately 1.5 times our current market capitalization is an important step in creating shareholder value,” Pioneer Chairman and Chief Executive Officer Nathan Mazurek said in a statement. “We are evaluating various options for the proceeds, including returning capital to shareholders and strategic M&A.
“We also continue to hold two viable businesses, and we expect to take steps to improve financial performance of these two entities in the near-term. In addition, we retain our Nasdaq listing and a sizeable position of 1.75 million shares and warrants to purchase an additional 1 million shares of CleanSpark Inc.,” he added.