MRO Magazine

Revolution Lighting Technologies, Inc. Acquires Energy Source, LLC, Advancing Its Rapidly Growing LED Technology Platform


August 5, 2015
By Business Wire News

STAMFORD, Conn.

Revolution Lighting Technologies, Inc. (NASDAQ:RVLT) (“Revolution Lighting”), a global provider of advanced LED lighting solutions, today announced it has acquired Energy Source, LLC, a turnkey provider of LED lighting based energy savings projects within the commercial, industrial, hospitality, retail, education and municipal sectors.

The acquisition brings together RVLT’s innovative portfolio of LED products and control systems with Energy Source’s expertise in providing LED focused energy savings projects, its strong customer base and preferred partnership status with utility companies across the Northeast, including National Grid and Eversource (formerly NStar). These partnerships, along with its customer base – including Citizens Bank, CVS Caremark and International Packaging – that covers facilities throughout the United States has enabled Energy Source to grow its revenues at a CAGR of over 45% since 2011.

Energy Source’s revenue and EBITDA are expected to be $30 million and $4.5 million, respectively, for the 2015 full year. In addition to the accretive effect of Energy Source’s existing business, RVLT is expected to provide Energy Source with a significant portion of its LED requirements in order to meet its customers’ demand for high quality LED products and solutions.

Under the terms of the agreement, RVLT paid a total purchase price of $30 million for 100 percent of the outstanding ownership interests of Energy Source: comprised of $10 million in cash, $10 million in RVLT common stock (approximately 8.8 million shares), and $10 million in the form of a promissory note (due on the one year anniversary of the acquisition with an annual interest rate of 5%) together with a 3 year earnout based on Adjusted EBITDA of Energy Source. The $10 million upfront cash portion has been financed through the issuance of RVLT common shares (approximately 8.7 million shares) to a non-affiliated investor.

The transaction has been structured so that the entire purchase price will be tax deductible for federal and state income tax purposes. RVLT expects the transaction to be accretive to earnings per share in the second half of 2015.

“We are excited to welcome Energy Source, as this strategic acquisition strengthens our existing relationships in key markets. With an ongoing need for energy efficiency and compelling savings, not only do we expect to see significant product pull-through from their existing and future projects, but a valuable resource as part of our growing management team,” said Robert V. LaPenta, Chairman, Chief Executive Officer and President of Revolution Lighting.

LaPenta further noted, “Mike Lemoi, president, and Ron Sliney, vice president, have over 55 years of combined experience in the lighting and energy business and they have clearly demonstrated, through their ownership and leadership of Energy Source, their deep understanding of the lighting and energy markets and the lighting solutions and programs that best serve these customers. We are very fortunate to have both Mike and Ron continue in their leadership roles at Energy Source and take on an active role within RVLT as we collaborate together for many years to come.”

“We are very happy to officially join the Revolution Lighting team as we share a similar full service approach to develop and implement cost effective energy efficient solutions for our growing list of clients,” said Mike Lemoi, President of Energy Source. “Revolution Lighting’s extensive LED product line and significant network platform combined with our comprehensive offering of LED based energy programs will allow Energy Source the ability to offer turn-key installations with superior LED products.”

“RVLT distributor partners will now also have the opportunity to offer full turn-key energy services to their existing customer base,” said Ron Sliney, Vice President of Energy Source. “We see this as a real win for all parties. Energy source will have the ability to bring a turnkey service to RVLT distributors helping them to increase LED product sales within their markets. This also will allow Energy Source to drive core RVLT products and services throughout the country and into many different market segments.”

“Energy Source has a vast amount of experience in a multitude of market segments including municipal, hospitality, commercial, industrial, retail, and educational. We are excited for the opportunity to continue to grow our business nationally with RVLT LED lamps, fixtures and network partners,” says Lemoi. “This relationship will allow us to drive our high-impact sales and energy service organization locally as well as nationally.”

About Revolution Lighting Technologies Inc.

Revolution Lighting Technologies, Inc. (NASDAQ:RVLT) is a leading LED lighting solutions company. We design, manufacture, market and sell energy-efficient LED and conventional lighting solutions with a strong presence in the industrial, commercial and government markets in the United States, Canada, and around the world. Revolution Lighting has created an innovative, multi-brand, lighting company that offers a comprehensive product platform of high-quality interior and exterior LED lamps and fixtures with a focus on the developing market for LED lighting solutions.

Revolution Lighting markets and distributes its products through a network of independent sales representatives and distributors, as well as through energy savings companies, national accounts and its wholly owned subsidiary, Value Lighting, a leading supplier of lighting solutions to the multifamily residential housing sector and new construction marketplace across the U.S. Other brands within our RVLT family include Lumificient, which supplies LED illumination for the signage industry; and Sentinel, a revolutionary patented and licensed monitoring and smart grid control system for outdoor lighting applications. Revolution Lighting was recognized as a 2014 Deloitte technology fast 500 company. For additional information visit: www.rvlti.com.

About Energy Source

Energy Source is a turnkey implementer of comprehensive energy savings projects, which includes comprehensive energy audits, installation, and rebate incentives within the Commercial, Industrial, Hospitality, Retail, Education and Municipal sectors. Additionally, the company provides LED lighting and controls solutions. Energy Source works closely with its clients such as Citizens Bank, CVS Caremark and International Packaging to identify energy conservation opportunities from “broad stroke” identification through actual implementation of projects. For more than 20 years, they have helped clients realize their energy goals, reduce simple paybacks, and maximize return on investments by identifying energy conservation opportunities through actual implementation of projects. For additional information, visit: http://www.energysource.com

Cautionary Statement for Forward-Looking Statements

Certain of the above statements contained in this press release are forward-looking statements that involve a number of risks and uncertainties, including statements relating to our business pipeline and sales opportunities, our revenue, Adjusted EBITDA and cash flow outlook. Such forward-looking statements are within the meaning of that term in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Reference is made to Revolution Lighting’s filings under the Securities Exchange Act for additional factors that could cause actual results to differ materially, including our history of losses, customer concentration risks, the potential for future dilution to our existing common stockholders, our status as a controlled company, the risk that demand for our LED products fails to emerge as anticipated, the availability of financing for our customers, competition from larger companies, and risks relating to third party suppliers and manufacturers, as well as the other Risk Factors described in Item 1A of our Form 10-K for the fiscal year ended December 31, 2014. Revolution Lighting Technologies, Inc. undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those indicated in the forward-looking statements as a result of various factors. Readers are cautioned not to place undue reliance on these forward-looking statements.

For Revolution Lighting Technologies, Inc.
Amato and Partners, LLC
Investor Relations Counsel
Gerald Amato, 212.430.0361
admin@amatoandpartners.com