VivoPower International PLC [NASDAQ: VVPR] announced yesterday that it has entered into a definitive agreement with Tembo e-LV to acquire 51% of its stock.
The Netherlands based company Tembo e-LV that specializes in off-road vehicles and battery electric has a global footprint with distributors in four major continents. It currently services a range of sectors including infrastructure, mining, government utilities, humanitarian aid, and game safaris. The company provides customized off-road vehicles suitable for rugged terrains and light electric vehicles.
VivoPower plans to part with USD$4.7 million for 51% and has the option of acquiring the remaining 49% hence controlling the entire company. This transaction is based on customary closing conditions that include funding mix requirements and capital structuring.
VivoPower sees some potential in Tembo following Tembo’s financial reports in the fiscal ended December 31, 2019. Tembo had unaudited revenue of USD$2.3 million. VivoPower, using publicly available data estimates that the commercial fleet electric vehicles market could be in the range of $36 billion. This market presents lucrative opportunities, and this is considering that the market does not include the United States, South America, and Asia, meaning it could be even bigger.
VivoPower’s Executive Chairman and CEO said that the company is looking forward to scaling up Tembo’s capacity to maximize its potential and enable it to increase its production capacity of rugged commercial fleet electrification solutions. VivoPower is focussed on providing these solutions to the infrastructure, mining, and global utilities but will soon diversify to other sectors. Currently, the two companies, VivoPower and Tembo have a combined customer base of 700. They could increase this if they venture into the US and Asia markets. Most of these clients are in infrastructure, utilities, and mining.
Tembo founder and CEO, Frank Daans welcomed this merge saying that Tembo will now fulfil the pending demands from their customers since this move will scale up their capacity and improve efficiency, thus producing more at reduced costs. This will be possible considering that the two companies have already begun joint operations.
This move adds to the company’s intrinsic value and with market optimism rising due to hopes of a stimulus package, buyers could rally into growth stocks short-term.
VivoPower is an energy company specializing in battery technology, solar power, electric vehicles, and critical power services. The company’s main mandate is to provide sustainable power and energy solutions to its clients. The company has a global outlook with operations in the United States, the United Kingdom, Australia, and Canada.