MICT Completes Sale of Enertec Systems Aerospace and Defense Subsidiary
-- Transaction fortifies MICT's balance sheet by adding over $4.7 million in cash and reducing additional $4 million in Debt
-- Total effective transaction price of $8.7 million
-- MICT continues to implement its strategy to focus on its fast-growing MRM business to become a global dominant MRM player
MONTVALE, N.J., May 23, 2018
MONTVALE, N.J., May 23, 2018 /PRNewswire/ -- Micronet Enertec Technologies, Inc. (NASDAQCM: MICT) announced today that it has completed the previously announced sale of its wholly owned aerospace and defense subsidiary, Enertec Systems 2001 Ltd., or Enertec, to Coolisys Technologies Inc., a subsidiary of DPW Holdings, Inc. (NYSE American: DPW).
"With the closing of this transaction and with a stronger balance sheet, MICT will focus, in advancing its potential opportunities in the multi-billion dollar Mobile Resources Management (MRM) space. We have added over $4.7 million in cash and strengthened our balance sheet by removing the entire debt of Enertec, which totaled approximately $4.0 million, bringing overall effective transaction price to $8.7 million for all of Enertec's assets and liabilities.
With the sale of Enertec, we expect our gross margins to improve significantly," said David Lucatz, Chief Executive Officer of Micronet Enertec Technologies, Inc.
"We intend to invest our resources into increasing our sales momentum in MRM, which produced 121% year-over-year growth in the first quarter of 2018, with improving margins and a backlog of $4.7 million. With a fortified balance sheet, we believe that MICT is well positioned for both organic growth and expansion through acquisitions."
MICT received over $4.7 million in cash at the closing (of which 10% will be held in escrow for up to 14 months after the Closing to satisfy certain potential indemnification claims). The final consideration amount was adjusted pursuant to the terms of the agreement with DPW as a result of adjustments relating to certain debts and cash balances of Enertec at closing. Coolisys also assumed approximately $4.0 million of Enertec's debt.
"We wish Coolisys success with its acquisition of Enertec, and we believe our former Enertec customers and employees will be well served by Coolisys Technologies and DPW Holdings," Lucatz added.
Micronet Enertec intends to change its name in the near future.
About Micronet Enertec Technologies, Inc.
Micronet Enertec Technologies, Inc. (NASDAQCM: MICT) provides rugged mobile devices for the growing commercial Mobile Resource Management (MRM) market. MICT develops, manufactures and provides mobile computing platforms for the mobile logistics management market in the U.S., Europe and Israel. American manufactured systems are designed for outdoor and challenging work environments in trucking, distribution, logistics, public safety and construction.
This press release contains express or implied forward-looking statements within the Private Securities Litigation Reform Act of 1995 and other U.S. Federal securities laws. These forward-looking statements include, but are not limited to, those statements regarding our expectation regarding focusing on the MRM space, the strength of our balance sheet, our expectation that our gross margins will improve significantly, investing resources into increasing sales momentum in MRM, that we are well positioned for both organic growth and expansion through acquisitions, statements regarding our backlog and changing our corporate name. The forward-looking statements contained in this press release are subject to other risks and uncertainties, including those discussed in the "Risk Factors" section and elsewhere in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission and in subsequent filings with the Securities and Exchange Commission. Except as otherwise required by law, the Company is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.
SOURCE Micronet Enertec Technologies, Inc.