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Solar Thin Films, Inc., a developer, manufacturer and marketer of manufacturing equipment for the production of 'thin-film' amorphous silicon photovoltaic solar modules, has entered into a share exchange agreement to acquire Algatec Solar AG, a German company that produces and markets metallurgic silicon crystalline solar panels or modules.
Algatec currently has a backlog of contracted-for orders for crystalline photovoltaic solar modules of approximately 92 MW in 2009. Approximately 87 percent of the 2009 backlog, or 80 MW, is represented by sales to Q-Cells International GmbH, a producer of metallurgical crystalline and other solar cells capable of converting solar energy into electricity. Algatec has entered into an OEM agreement with Q-Cells for the sale of approximately 80 MW of crystalline photovoltaic solar modules in 2009, which Algatec believes will represent approximately $100.0 million in 2009 revenues. The OEM agreement with Q-Cells expires on December 31, 2009, and the renewal or extension of such agreement beyond such date is subject to negotiation and mutual agreement of the parties.
Based on its unaudited statement of operations, for the nine months ended September 30, 2008, Algatec and its predecessor generated approximately EUR 1.27 million (approximately $1.65 million) in net income on revenues of approximately EUR 8.6 million (approximately $11.2 million), as compared to its 2007 results of a loss of EUR 378,000 on revenues of EUR 2.5 million.
In order to increase its production capacity to meet its order backlog, Algatec will have to expand its existing manufacturing facility located in Prosen, Germany and install five lines of production equipment in its facility. The cost of such facility expansion and production lines is approximately EUR 34.6 million ($50.0 million).
Commenting on the proposed transaction, Robert M. Rubin is the Chairman and Chief Financial Officer of Solar Thin Films said: "Combining forces with Algatec enables Solar Thin Films to produce equipment for amorphous silicon modules as well metallurgical crystalline photovoltaic modules. With our recent agreements to acquire BudaSolar Ltd. of Hungary and our proposed acquisition of Algatec, Solar Thin Films is positioning itself to command leading-edge technical expertise in the development of equipment and modules utilizing of variety of technological innovations."
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