Acquisition Bid for Dankoff Solar Products

Dankoff Solar, a veritable household name in the solar industry, will likely be acquired by Canada-based ARISE Technologies Corporation, an emerging company in the rapidly growing North American solar energy business. This brings Dankoff Solar full circle from its humble beginnings in the South West desert of the United States to the possibility of becoming a major part of a publicly traded company.

Santa Fe, New Mexico – March 3, 2004 [] Arise has entered into a stock purchase agreement to acquire all the outstanding shares of Santa Fe, New Mexico-based Dankoff Solar, a longtime distributor of solar energy components and solar water pumping technology in the United States. The company was founded by Windy Dankoff, who will be on the new advisory board for Arise. “This merger is a great fit,” Windy Dankoff said. “I expect it to benefit everyone involved, and help bring our industry into the mainstream.” Located in Kitchener, Ontario, Canada, Arise has focused on solar energy research & development and is a major distributor in Canada. It expanded into the distribution part of the business with its acquisition of Prometheus Energy, Canada’s oldest renewable energy supplier and distributor in December 2001. Arise is publicly traded on the TSX Venture Exchange. Completion of the acquisition is subject to a number of conditions including the approval of the transaction by the TSX (Toronto Stock Exchange) Venture Exchange and completion of the previously announced $5.0 million private placement financing. ARISE has agreed to pay USD $4.5 million for the outstanding shares of Dankoff, which will be financed with a combination of cash, debt, common stock and a performance based earn out. Dankoff has estimated 2003 sales, subject to final audit, of USD $11,750,000, EBIT of $USD 786,000 and has a three-year compounded annual EBIT growth rate of approximately 66% per year. The cash portion of the acquisition cost will be funded through the $5 million private placement financing previously announced on January 19, 2004. Following the closing of the transaction, which is expected in March 2004, the existing operations of ARISE and Dankoff will continue to operate from their existing offices in Kitchener, ON and Santa Fe, NM. Highlights of the Transaction: – Both companies have a compounded annual revenue growth of more than 50% per year over the past three years – The combined entity is expected to be profitable in 2004 – Expected combined 2004 revenues will be greater than $20 million – Both businesses operate value added distribution networks and upon closing, will serve a customer base of approximately 600 dealers across North America – Dankoff is well positioned in the Southwest U.S. markets – Both companies emphasize systems integration in their product design – Both companies share similar cultural values – Both organizations have a deep commitment to customer service and technical advice. “Dankoff is a widely respected name in the solar energy industry and we believe that this transaction will make both organizations stronger,” said Ian MacLellan, President and CEO of Arise. “As North American demand continues to grow for solar energy, so will the opportunities to grow and expand through acquisition. We view the combining of our two organizations as foundational to positioning ourselves as a North American leader.” “In addition to the many synergies our two businesses share, Arise brings us the influence and corporate culture of a publicly listed company,” said Paul Benson, President of Dankoff. “We look forward to maximizing our strengths as together we seek to lead the North American solar energy industry.” Reporting to Ian MacLellan, Paul Benson will continue to be responsible for Dankoff operations as Vice President, U.S. Operations. In recognition of the predominate role he has had over the last two years, Michael Ben, previously Operations Manager and Chief Financial Officer (CFO) of Arise is promoted to Vice President and General Manager of Canadian Operations retroactive to January 1, 2004. Arise will actively search for a new corporate CFO following the successful completion of the acquisition. In addition, Arise also announced the signing of a collaboration agreement with Komag Inc. in order to pursue the commercialization of the Arise patented photovoltaic (PV) technology currently under development at the University of Toronto. Komag is the world’s largest independent supplier of thin-film disks, the primary high-capacity storage media for digital data. Komag will be responsible for the manufacturing and Arise will be responsible for the marketing and distribution of products as a result of this ongoing research and development project. “Komag’s expertise with respect to thin-film-based products and processes will greatly enhance the development of our photovoltaic technology,” said Arise President and CEO, Ian MacLellan. We believe this project has the potential to make a significant contribution to our industry in the long term.”
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