Acorn Energy, Inc. today announced the sale of a 50% strategic interest in its DSIT Solutions, Ltd. business to Rafael Advanced Defense Systems, a major Israeli defence company.
Including the earn-out, the implied company value of DSIT reflected in the transaction is $15.1m. Initial gross proceeds from the transaction will be $6.6m and Acorn expects to receive gross proceeds of approximately $4.9m before escrow, fees and taxes. Acorn is also eligible to receive its pro-rata share of a $1m earn-out over a three-year period.
The proceeds of the sale will be used by Acorn to repay approximately $2.4m of short-term debt and other liabilities and for general working capital purposes.
Benny Sela, CEO of DSIT, said, "We have long-admired Rafael and its culture of innovation and excellence. We are excited to become its partner and hope to leverage its technology capabilities, as well as its global sales reach to support and extend DSIT’s growth and realisation of our existing sonar technology along with our new technology of Fibre Optic based sensing."
Acorn Energy CEO John Moore commented, "As DSIT landed larger projects each year, we recognised that DSIT needed a stronger partner to support and expand the size and scope of projects they could take on.
"Rafael is a terrific company, known around the world for its ‘Iron Dome’ air defence system, among other world leading products."
The transaction requires the approval of the Israeli Ministry of Defense and the Israeli Anti-Trust Authority.