Strategic Acquisition Expands Production Capacity and Deepens R&D Capabilities
DUARTE, Calif., Feb. 22, 2022 (GLOBE NEWSWIRE) — On February 15, 2022, iPower Inc. (NASDAQ:IPW) (“iPower” or the “Company”), one of the leading online hydroponic equipment suppliers and retailers, acquired Anivia Limited, a British Virgin Islands company, for US$12 million. Anivia Limited controls a 100% interest in iPower’s largest global co-engineering partner, Daheshou Shenzhen Information Technology Co. Ltd (“DHS”).
DHS is a service provider based in Shenzhen, China that is engaged in R&D, distribution, quality assurance, end-to-end supply chain management services, and online merchandising services. DHS provides these services to markets throughout North America, Europe and Asia. DHS generated approximately $9.0 million of gross sales in fiscal year 2021, with the majority of that revenue coming from iPower, DHS’s largest customer.
The acquisition of DHS will expand iPower’s current supply chain and e-commerce capabilities through in-house product sourcing, manufacturing network management, quality assurance processes and R&D expertise.
“Since the onset of the global pandemic and throughout the past year’s volatile supply chain environment, we have relied extensively on DHS to source consistent, high-quality products in a timely fashion,” said iPower CEO Lawrence Tan. “Their deep sourcing network and R&D expertise have been invaluable assets to our company. Bringing our key supplier and logistics service provider in-house will strengthen our supply chain and reduce the risk of potential supplier turnover. We also plan to utilize DHS for the benefit of our recently announced joint ventures, which will extend our new suite of services to a broader set of customers and partners going forward.”
The $12.0 million in transaction consideration includes $1.5 million of cash and a $3.5 million unsecured promissory note, with the remaining $7.0 million paid in the form of 3,083,700 shares of iPower common stock, valued at $2.27 per share, which was the closing price of our common stock traded on the Nasdaq Capital Market on February 15, 2022. The promissory note bears interest at a rate of 6% per year and will mature in two years. All common stock issued is subject to a 180-day lock-up period following the closing of the transaction.
Additional information can be found on our Current Report on Form 8-K filed with the Securities and Exchange Commission on February 22, 2022.
