Powell Industries To Acquire PowerComm

EDMONTON , Oct. 21 /CNW/ - PowerComm Inc. (PCG:TSX) ("PowerComm" or the "Corporation"), following completion of due diligence requirements, today announced it has entered into Asset Purchase Agreements (collectively the "APA") with three affiliates of Powell Industries Inc.(NASDAQ:POWL) (collectively, "Powell") of Houston , Texas. Pursuant to the APA, Powell will acquire substantially all of the assets of the Corporation and its affiliates for cash consideration of up to $33.5 million subject to adjustments, with $25.5 million payable on closing and up to $8.0 million payable based on PowerComm achieving specified performance and earn-out thresholds for the 12 months ending March 31, 2010 . Powell will also assume certain liabilities of PowerComm including bank debt, accounts payable and obligations under capital leases estimated to total approximately $ 22.5 million .

Powell is a leading manufacturer of equipment and systems for the management and control of electrical energy and other critical processes.

"We are excited to have the opportunity to be the organization Powell has chosen to grow their footprint in the Canadian marketplace," said Wayne Rutherford , President & Chief Executive Officer of PowerComm, "while this transaction allows us to continue to provide all of our existing services we are confident Powell's product and service offering can only enhance what PowerComm already provides our diverse customer base," he continued.

Patrick L. McDonald, Chief Executive Officer of Powell, stated, "This is an exciting opportunity for Powell, giving us an electrical service and manufacturing presence in western Canada . We are enthusiastic about the prospect of building new client relationships and leveraging the strength already demonstrated by the PowerComm organization."

The transaction is expected to close on or shortly after December 15, 2009 and is subject to the satisfaction of various conditions precedent typical of a transaction of this nature, including the receipt of shareholder and all necessary consents and regulatory approvals, including the approval of the Toronto Stock Exchange. A shareholder meeting to approve the transaction has been scheduled for December 15, 2009 , and the associated management information circular containing important information respecting the transaction will be mailed to shareholders by November 9, 2009 .

The Corporation's lender, if the terms of the APA are agreeable to it, intends to extend the period of forebearance past the expected closing date.

In approving the transaction, the Board of Directors of the Corporation relied on the recommendation of an independent Special Committee of its Board of Directors which was established to review the transaction. The Special Committee was provided with an opinion from McNally Valuations Inc. that the transaction is fair, from a financial point of view, to the Corporation's shareholders. A copy of this fairness opinion will be included in the management information circular and shareholders are encouraged to read it in its entirety as it contains important assumptions and other information.

Reader Advisory

The news release contains certain forward-looking statements, including management's assessment of future plans and operations and capital expenditures and the timing thereof, that involve substantial known and unknown risks and uncertainties, certain of which are beyond the Corporation's control. Such risks and uncertainties include, without limitation, risks associated with the Corporation's ability to market successfully to current and new customers; supply and demand for the Corporation's services and products and industry activity levels; capital expenditure programs; projections of commodity prices and costs; the Corporation's ability to obtain material and equipment from suppliers; operating risk liability; expansion of services and products by internal growth or acquisition; the Corporation's ability to obtain additional financing on satisfactory terms; the impact of general economic and industry conditions; changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced; competitive conditions; the lack of availability of qualified personnel or management; fluctuations in foreign exchange or interest rates, stock market volatility; and obtaining required approvals of regulatory authorities. The Corporation's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that the Corporation will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. There can be no assurance that the transaction described in this news release will be completed, as it is subject to the satisfaction of numerous conditions, many of which are beyond the Corporation's control. All subsequent forward-looking statements, whether written or oral, attributable to the Corporation or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as of the date of this news release and the Corporation does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

For further information: Wayne R. Rutherford, President and Chief Executive Officer or J.D. Snowdon, Executive Vice President Corporate Services at [phone] or at [email protected]