UQM Technologies, Inc. has entered into a definitive merger agreement with the Danfoss Power Solutions (US) Company, a wholly-owned subsidiary of Denmark-based Danfoss A/S, under which Danfoss will acquire all outstanding common shares of UQM for $1.71 per share in an all-cash transaction valued at approximately $100 million, including the assumption of UQM’s debt.
Danfoss, a privately-owned multinational company with reported sales of €5.8 billion (US$6.6 billion) in 2017 (2018 full year results to be released on 28 February), is a leading manufacturer of hydraulic systems, drives, motors, and components for the automotive, aerospace, HVAC, and energy industries. The merger anticipates that UQM will become part of the Danfoss Power Solutions segment.
The cash consideration represents a premium of approximately 52.5% over UQM’s closing share price on 18 January 2019 and a 71.4% premium to its weighted average trading price over the trailing 60 days.
The transaction will be funded with Danfoss’ cash on hand and is not subject to any financing condition. The merger agreement was unanimously agreed to by the Boards of Directors of both UQM and Danfoss; GDG Green Dolphin, LLC—which holds approximately 7.4% of the issued and outstanding shares of UQM—and all UQM directors and officers have executed Voting and Support Agreements in favor of the acquisition.
Closing of the transaction is subject to approval by two-thirds of UQM shareholders and by the Committee on Foreign Investment in the United States (CFIUS) as well as other customary closing conditions.
We believe UQM will be an excellent addition to Danfoss as our products, business model, strategy and focus are closely aligned. Being part of a larger global enterprise will greatly improve our position to compete with other international players, open doors to new markets, and provide critical resources for UQM to continue developing the highly-engineered electric propulsion products we’re known for today. We believe the transaction positions UQM well for the future—particularly in key geographies such as China and India, where Danfoss already operates—and provides an attractive return for our shareholders. We’re proud of our many accomplishments and look forward to a future with Danfoss, with which we can enhance service for our customers, invest in technology, and adapt to the ever-changing dynamics of our core markets.—Joe Mitchell, UQM Technologies’ President and CEO
We see fast-growing demand for electric solutions within buses and trucks, off-highway vehicles, and marine markets in response to the more stringent emission regulations being imposed—stimulating interest in the efficiency and productivity gains our solutions bring. With an established North American presence, UQM will complement our global sales and manufacturing footprint nicely, further cementing our strong position in the marine as well as on- and off-highway markets. I look forward to welcoming the UQM team to Danfoss and our business.—Kim Fausing, President & CEO of Danfoss
The transaction is expected to close in the second quarter of 2019, subject to approval by UQM’s shareholders and CFIUS.