Westinghouse Solar Inc. (Nasdaq: WEST) said it has signed a letter of intent to pursue a business combination with CBD Energy (ASX:CBD.AX), a renewable energy company based in Sydney, Australia. Key terms of the transaction have been approved by the boards of directors of both companies, subject to satisfactory completion of due diligence and definitive agreements.
The companies said they are targeting prompt execution of definitive documents in early March 2012 and a third quarter closing date, subject to shareholder approvals and other customary closing conditions. The contemplated transaction structure would be effected solely through an exchange of shares.
Under the terms conditionally approved by the Westinghouse Solar and CBD Boards of Directors and outlined in a letter of intent (LOI), Westinghouse Solar shareholders would receive shares of common stock in CBD Energy in exchange for their shares of Westinghouse Solar. The terms of the LOI would result in the current holders of equity securities of CBD owning 85 percent of the combined company common stock, and the equity holders of Westinghouse Solar (on a fully diluted basis, including convertible securities, options and warrants) owning 15 percent of the combined company common stock, prior to the effect of any future capital financing transactions by either company.
Chardan Capital Markets LLC is the exclusive financial advisor to CBD in connection with the proposed transaction.
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