WindPower Innovations, Inc. (PINKSHEETS: WPNV) announced today that the Company and Gearstar Performance Transmissions, Inc. of Akron, Ohio, have signed a letter of intent which provides the framework for the acquisition of Gearstar by WindPower Innovations in a share exchange. The exact details of the exchange and the amount of shares to be exchanged will be determined after completion of final due diligence of Gearstar.
Gearstar is a well-known rebuilder of high performance, high quality gearboxes and vehicle transmissions, with annual revenue of approximately $1.2 million per year. Gearstar has excess capacity in its facilities where it can rebuild the gearboxes that are at the heart of WindPower Innovations' wind turbines. By being acquired by WindPower, Gear Star will gain access to additional capital, liquidity for its shareholders by being public and additional markets in the wind energy sector exclusively with and through WindPower.
John Myers, CEO of WindPower Innovations, commented, "The acquisition of Gearstar Performance, will allow WindPower to vertically integrate a portion of its products by rebuilding the gearboxes "in house." This will lower our costs, improve our standard of high quality and allow us to be more competitive in the renewable energy market place."
Zach Farah, CEO of Gearstar Performance Transmissions, stated, "Gearstar is excited for the opportunity to begin rebuilding the gearboxes for the enhanced products and services that WindPower provides. This will add a new dimension to our business and utilize our excess capacity."
WindPower will now diligently seek to complete the acquisition of Gearstar and begin a larger scale marketing effort to engage more customers under the WindPower brand while seeking growing pool sales and maintenance under the Cameo Group brands.
This acquisition fits into WindPower's continued acquisition strategy to acquire synergistic companies that management believes can enhance shareholder value through increased revenue, lower costs and better branding.