Arkados R&D Conducted at Ben Franklin TechVentures
BETHLEHEM, PA and CHARLSETON, SC — Arkados Group, Inc. (OTC:AKDS), a leading software developer and system integrator enabling Internet of Things (IoT) applications for commercial and industrial customers, announced it has completed the acquisition of SolBright Renewable Energy, LLC, a renewable energy design and development company based in Charleston, SC. Arkados maintains an R&D office in Ben Franklin TechVentures®, Bethlehem, the technology-based business incubator owned and managed by the Ben Franklin Technology Partners of Northeastern Pennsylvania.
Patrick Hassell has been appointed as the President of Arkados Energy Solutions, LLC, Arkados’ energy services business. Mr. Hassell most recently served as the Founder and Managing Director of SolBright Renewable Energy. Prior to SolBright, Hassell was President and CEO of AkroMetrix, a prominent microelectronics industry equipment manufacturer. He earned a BS in Civil Engineering from the University of Virginia and a Master’s of Science in Management from the Georgia Institute of Technology.
SolBright Renewable Energy is a leading provider of turnkey development, engineering, procurement and construction (EPC) services for the commercial/industrial and military solar photovoltaic markets. Arkados paid $15 million in a combination of cash, debt and stock for substantially 100% of the assets of SolBright, including a current backlog of approximately $40 million in distributed generation EPC projects and a substantial pipeline of additional projects throughout the Eastern United States. This transaction allows Arkados to significantly expand its Arkados Energy Solutions business into the rapidly growing renewable energy industry and is expected to open new customer opportunities for its cutting-edge Internet of Things solutions.
“SolBright has been one of the more active super-regional designers and installers of solar systems primarily along the East Coast but as far reaching as California, by completing approximately 30 MW of projects during that time. SolBright’s strong track record, which is a testament to Patrick and his team, yielded industry-leading win rates and a loyal blue chip customer base,” said Terrence DeFranco, CEO of Arkados Group, Inc. “The closing of this acquisition marks an important milestone in our growth and is expected to be a tremendous catalyst for revenue and earnings growth. Our unique model of combining the value of renewable energy services with the vast benefits of our IIoT Arktic™ software platform create great value for our customers and our shareholders and we have great confidence in Patrick and his team leading this business to new heights.”
“We believe that this transaction will allow us to take our business to the next level and realize many more opportunities with our existing and future customer opportunities,” stated Mr. Hassel. “Over the past eight years, we’ve built an award-winning business and established our brand that has become known for quality, reliability and excellent service. With Arkados, we can add a cutting-edge set of services that should help to establish us as a clear leader in the industry. The SolBright team is very excited to have access to Arkados’ technology solutions based on our belief that our customers will greatly benefit from them.”
AIP Private Capital and AIP Asset Management acted as the lead investors for the acquisition financing, providing $2 million in convertible debt and an additional $500,000 in equity.
L2 Capital, LLC and SBI Investments, LLC provided subordinated debt in the amount of $792,000 and the Company secured additional working capital of approximately $600,000 in equity from other investors.
Joseph Gunnar & Co., LLC, a leading New York City-based securities and investment bank established in 1997, acted as the placement agent and advisor to Arkados and will continue in this capacity as the Company explores other opportunities.
The Capital Corporation, a leading investment bank headquartered out of Greenville, South Carolina and with offices in Spartanburg, South Carolina and Boca Raton, Florida, served as the exclusive investment banking advisor to SolBright on the transaction.
Detailed information related to the transaction can be found in the Company’s Current Report on Form 8K filed with the Securities and Exchange Commission on May 5, 2017 at www.sec.gov.
General Electric estimates that the Industrial Internet of Things (IIoT), the use of sensing, data gathering, monitoring and controlling commercial and industrial machinery, will reach $60 trillion worldwide in the next 15 years. IIoT technology and software applications in combination with on-site renewable energy generation and emerging battery storage capabilities provides a complete solutions set for optimizing energy efficiency and corporate energy spend. In November 2015, Gartner estimated that the Internet of Things will consist of 20.8 billion connected objects in use by 2020, up from 6.4 billion in 2016 and that enterprise customers represent the largest spending on these devices. Another more recent Gartner report estimates IoT deployment in commercial buildings is on track to reach just over 1 billion in 2018.
About Arkados Group, Inc.
Arkados Group, Inc. (“Arkados” or the “Company”), through its subsidiaries, is a provider of scalable and interoperable Internet of Things solutions focused on industrial automation and energy management. It maintains an R&D office in Ben Franklin TechVentures, Bethlehem. The Company executes its business as a software-as-a-service (SaaS) application developer and energy services firm that helps commercial and industrial facilities owners and managers leverage the Internet of Things to reduce costs and improve productivity with unique, cutting-edge building and machine automation solutions. Arkados’ Arktic™ software platform is a scalable and interoperable cloud-based system for sensing, gathering, storing, analyzing data as well as reporting critical information and implementing command and control. Its applications currently focus on measurement and verification and predictive analytic and are delivered to customers as a complement to our services business, which focuses primarily on reducing energy costs through solar PV, LED lighting and other energy conservation services for the commercial and industrial facilities market. www.arkadosgroup.com.
About SolBright Renewable Energy, LLC
SolBright Renewable Energy is a turnkey developer and EPC of Solar Photovoltaic projects for long term, stable, distributed power solutions. SolBright focuses on military, municipal and commercial/industrial markets, with projects ranging in size from 100 kWp to 5,000 kWp. SolBright’s services include market assessment, design/engineering, installation, operation and maintenance/monitoring, financing and project ownership. SolBright has distinct competitive advantages for ground, parking canopy and roof-top solar applications that ensure integration with existing/new roof warranties. SolBright has a national reach within the United States, with projects successfully delivered throughout the southeast, mid-Atlantic and northeast and as far west as California.
About AIP Asset Management
AIP is a Toronto-based asset management company, managing hedge and mutual funds and discretionary separately managed accounts. AIP has been named Best Global Macro Hedge Fund in Canada at the Hedge Fund Awards sponsored by Barclay Hedge and was nominated for the Ernst and Young Entrepreneur of the Year Award. Its core focus is to help clients, be they institutions, hedge funds, mutual funds, family offices, or retail investors, achieve their investment goals.
About AIP Private Capital – it is a privately-held investment firm, focuses on emerging growth companies primarily in Financial Services and Technology sectors with unique assets, strong business models and seasoned management teams with the skills and ability to grow the company quickly to profitability. AIPPC provides private equity/debt, VC, special situations investments and short-term financing as well as technical, board and managerial leadership. AIPPC is a member of the CVCA, TMA and was recently nominated for the Ernst and Young Entrepreneur of the Year Award.