8.3.2007: Meldung: American Superconductor Corp.: Acquisition of Power Quality Systems, Inc.

AMSC Strengthens Utility, Industrial and Wind Energy Product Offerings with Acquisition of Power Quality Systems, Inc.

Wednesday March 7, 7:30 am ET
-- Company to Acquire Thyristor Switch Technology, Significantly Enhancing AMSC"s Reactive Compensation Product Offerings
-- $3.8 Million All-Stock Deal Expected to Accelerate AMSC"s Sales in the Utility and Industrial Sectors Worldwide

WESTBOROUGH, Mass.----American Superconductor Corporation , a leading energy technologies company, announced today that it has signed a definitive merger agreement to acquire Power Quality Systems, Inc. (PQS) in an all-stock transaction valued at approximately $3.8 million, or approximately 1.3 times PQS sales for calendar year 2006. Based in Pennsylvania, PQS offers reactive compensation products known as Static VAR Compensators, or "SVCs," based on its proprietary thyristor switch technology. These products enhance the reliability of power transmission and distribution grids and greatly improve the quality of power for manufacturing operations. The acquisition is expected to close in April 2007.

Thyristor switches are the heart of many power electronic-based reactive compensation products, including SVC systems. These systems are used to regulate and stabilize power grid voltage, which increases grid reliability and allows more power to be transmitted over existing power transmission lines. Utilizing PQS"s proprietary thyristor switch, AMSC expects to offer SVC systems that not only have a lower initial cost, but also lower energy and maintenance costs and a smaller footprint when compared with conventional products.

"The proprietary technology PQS has developed and marketed over the past 10 years will significantly enhance AMSC"s reactive compensation product offerings," said Greg Yurek, founder and chief executive officer of AMSC. "PQS sales to date have been mostly limited to municipal and co-operative electric utilities and smaller industrial operations. AMSC expects to utilize its worldwide sales force and business relationships with large electric utilities to accelerate the growth in sales of PQS"s product line. In addition, by combining PQS product offerings with AMSC"s control system technology and transmission grid engineering expertise, we expect to be able to more effectively address larger-scale SVC order opportunities from utilities. The addressable market for large-scale SVC solutions in the U.S. alone is approximately $100 million annually, and it is increasing rapidly as electric utilities focus on strengthening the nation"s transmission infrastructure."

AMSC"s current reactive compensation offerings for electric utilities include Dynamic-Volt-Ampere-Reactive systems, or D-VAR® systems, and a dynamically controlled SVC solution, also known as a Dynamic VAR Compensator, or DVC(TM) system. Power Quality Systems has an installed base of more than 60 SVC systems with ratings of up to 28 megaVAR (MVAR) in North American utility grids and industrial sites.

AMSC has agreed to purchase PQS for approximately $3.8 million worth of stock. The shares are subject to a lockup agreement whereby the current owners of PQS may sell only a certain number of shares per year through March 2009. While the current owners are financial participants only and will not be employed by AMSC subsequent to the acquisition, all key PQS engineering personnel are expected to remain with the company. The all-stock transaction also includes an earn-out opportunity with the potential for up to an additional 475,000 shares of AMSC common stock to be issued to PQS"s current owners based on the achievement of certain order growth targets for existing PQS products for the fiscal years ending March 2008 and 2009.

For the 12 months ended December 31, 2006, PQS"s unaudited financial results include revenues of approximately $3 million and a net loss of approximately $400,000. This compares with revenues of approximately $1.2 million and a net loss of approximately $900,000 the prior year. AMSC expects to increase sales of PQS"s current product line by approximately 67% to $5 million for FYMarch2008. AMSC is not assuming any long-term debt in the transaction, and it expects the acquisition to be immediately accretive to earnings before interest, taxes, depreciation, amortization and stock-based compensation (EBITDAS).

AMSC"s Power Electronic Systems business unit, with the inclusion of Windtec and PQS, is expected to grow its revenues from approximately $25 million in FYMarch2007 to at least $55 million in FYMarch2008. This compares with the company"s previous forecast for $50 million in Power Electronic Systems sales. AMSC also expects that the acquisition of PQS will enable it to increase its backlog of orders for large-scale SVC solutions during FYMarch2008, which it expects to recognize as revenue in FYMarch2009 and beyond.

About AMSC

AMSC (American Superconductor Corporation - NASDAQ: AMSC) is a leading energy technologies company. The company develops and sells a wide range of products and solutions based on power electronic systems and high temperature superconductor (HTS) wires that dramatically improve the efficiency, reliability and quality of electricity during its generation, transmission, distribution and use. The company is a dominant force in alternative energy, offering grid interconnection solutions as well as licensed wind energy designs and electrical systems. As the world"s principal supplier of HTS wire, AMSC is enabling a new generation of compact, high-power electrical products, including motors, generators, power cables, grid-level surge protectors, and advanced transportation and defense systems. AMSC also provides utility and industrial customers worldwide with voltage regulation systems that dramatically enhance power grid capacity, reliability and security, as well as industrial productivity. The company"s technologies are protected by a broad and deep intellectual property portfolio consisting of hundreds of patents and licenses worldwide. More information is available at www.amsuper.com.

American Superconductor and design, Revolutionizing the Way the World Uses Electricity, AMSC, Powered by AMSC, SuperVAR, D-VAR, DVC, PQ-IVR, PowerModule and Windtec are trademarks or registered trademarks of AMSC.


Contact:

American Superconductor
Media
Rick Sheehy, 508-621-4454
news@amsuper.com
or
Investors
Jason Fredette, 508-621-4177
investor@amsuper.com

Source: American Superconductor Corporation
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