Westinghouse Solar and CBD merge; CEO replaced

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The transaction is expected to be completed in the third quarter of 2012, following the completion of "limited" closing conditions and shareholder approval.

Under the merger agreement, the common shareholders of Westinghouse will reportedly receive approximately 3.7 CBD common shares for each share held. Meanwhile, its preferred shareholders will receive CBD preferred shares, which will be convertible into CBD common shares.

"On an as-converted basis the Westinghouse Solar common and preferred shareholders collectively would hold approximately 15 percent of the outstanding CBD common shares, calculated as-if the merger was consummated on the signing date. Upon consummation of the merger, the combined company is expected to trade on a U.S. exchange," added Westinghouse in a statement released today.

Upon the announcement of the merger, it was said that Westinghouse CEO, Barry Cinnamon will be replaced, on an interim basis, by CFO, Margaret Randazzo. She commented, "This transaction is expected to improve the financial standing of Westinghouse Solar allowing the company to better serve its established customers in the U.S. and creating a more solid platform for international growth."

MD and CEO of CBD, Gerry McGowan, added, "The merger provides CBD an immediate point of access with an experienced management team capable of driving rapid expansion for the combined business. We expect to leverage the Westinghouse Solar relationships to provide new opportunities for distributing energy-efficiency products and services produced by our Industrial Energy Efficiency Division and to create new outlets and applications for our proprietary energy storage technology."

Business development

Westinghouse has said it will continue to manufacture its rooftop solar power systems in the U.S. It will also look to distribute them in Australia and Europe through CBD. Furthermore, the two parties have begun looking at the development of commercial projects and partnerships in North America.

The statement continued, "Westinghouse Solar has already implemented cost reductions in anticipation of the Merger that are expected to save in excess of $1.0 million annually. Elimination of duplicative public listing costs, reduction of overlapping corporate overhead and supply-chain efficiencies are expected to yield additional benefits to the combined enterprise."

CBD said it has seen "significant growth" over the past three years. At the end of 2011, it posted revenues of AU$165 million and an EBITDA of $4.8 million. The company also recently announced the closing of a $25 million credit facility that, it said, will allow it to develop turnkey projects utilizing a Build-Operate-Transfer (BOT) model.